What Is Dividend Yield?
This is a series of explainers to educate and inform new investors. In association with Dun & Bradstreet India as knowledge partner.
Dividend Yield: Definition, Meaning & Basics
Dividend yield is the relationship between dividend per share and market price per share of a company. It is computed by dividing dividend per share by market price per share and multiplying the result by 100.
Dividend yield indicates percentage return that investors get per share in the form of dividend by investing in shares of the company. Many investors prefer high dividend yield stocks as it provides periodic income to them, mostly on an annual basis. This is the reason high dividend yield stocks are also called as income stock.
Companies which pay high dividend per share, do not retain high amount of profit with them. High dividend yield stocks are often recommended as good investment option, as these stocks help in generating second income for investors.