What is Dividend Yield?
Dividend Yield is a financial ratio
that indicates how much a company pays in form of dividends each year to its
shareholders in relation to its share price. It is expressed as a percentage
and can be calculated by dividing the rupee value of dividends paid in a given
year per share held by the market value of a share in rupee. See more at
>>> Investopedia,
Dividend Yield is Calculated as;
(Total Dividend per Share received during the year) / Market Price per
Share x 100
Let's Make it simple.....👀
Suppose you are having shares of Infosys in your portfolio and Infosys
declared and paid dividend three times in year 2017; two interim dividend of
Rs. 20 and one final dividend of Rs. 35 per share. In case of Infosys you
received total dividend of Rs.75 per share in 2017. Assume current market price
of Infosys is Rs. 1000. So in this example Dividend Yield of Infosys
will be; 75/1000 x 100 = 7.5%.
Why Dividend Yield is so Important ....👀
The story says that high-yielding dividend stocks outperform the long-term
market. When people are asked to invest in this category of stocks, they look
at me with astonishment. What they like most is the appreciation of capital.
Indeed, investors ignore the power of high-dividend shares, a high dividend
each year if reinvested in the market in the long term, it will contribute a
lot to capital appreciation. In my next post I will discuss in detail 'Magic
of Ploughing Back of Dividend'.
High Dividend Yield + Capital Appreciation = Multibagger Return🔃
Read also;
Top 10 High Dividend Paying Companies in India
- Coal India - 9.61%
- REC - 7.30%
- NMDC - 10.34%
- IOC - 2.27%
- ONGC - 5.62%
- Hind Zinc - 1.52%
- Indiabulls Housing Finance- 5.70%
- Tata Steel Limited : 2.11%
- ILandFS Transport: 2.04%
- Oracle Financial Services Software Limited : 3.20%
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