Dividend yield
A year's dividends per share divided by the current share price, showing the cash income a share pays relative to its cost.
Dividend yield = annual dividend per share ÷ current share price × 100.
It changes whenever the price changes. A very high yield can be a warning rather than a bargain: it often means the price has fallen because investors expect the dividend to be cut.
Example
A share priced at ₹500 that pays ₹15 a year in dividends has a dividend yield of 3%.
Learn more in these lessons
- Dividends, capital gains and lossesHow do you make or lose money from shares?
- Dividend payout and coverageHow can you tell whether a company's dividend is sustainable?
- Earnings, dividend and free cash flow yieldsHow do yields help you compare shares with each other and with bonds?
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