Dividend Yield

What is the Dividend Yield?

Dividend yield expresses a stock’s annual dividend as a percentage of its current price — the income return you receive from holding it, before any capital gains.

How to interpret it

A higher yield means more income per rupee invested, but an unusually high yield often signals a falling price or an unsustainable payout. Check the payout ratio and earnings stability.

What’s a good Dividend Yield?

In India, 2–4% is typical for healthy payers. Above 6–7% warrants scrutiny — it may reflect stress rather than generosity.

Common mistakes

• Chasing yield without checking if the dividend is sustainable.
• Ignoring that a yield rises simply because the price is crashing (a value trap).