Dividend Yield

Detailed explanation

Yield rises when the dividend increases or when the price falls — and the second reason is often the real one. A very high yield frequently signals that the market expects the payout to be cut.

Formula

Dividend yield = Annual dividend per share / Share price × 100

Example

₹18 of annual dividend on a ₹600 share is a yield of 3%.

Why it matters

For income-oriented portfolios, yield plus payout sustainability matters more than headline growth.

Key points

• Dividends in India are taxed at the investor's slab rate.
• Check the payout ratio to judge sustainability.
• Share price falls roughly by the dividend on the ex-date.

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