How much cash does the share pay you each year for the price you pay?
Dividend Yield
Lesson 11 of 11 · Price
Dividend yield is the yearly cash dividend per share as a share of today's share price.
In everyday life
You buy a mango tree for ₹100 and it gives you ₹3 of mangoes a year. Its yield is 3%. The tree can also grow in value, but that isn't part of the yield.
How it's worked out
Example: Sunrise Tea, a made-up company that sells packaged tea across India.
In words: ₹2 of cash a year for every ₹100 you pay for the share.
Try it yourself
Move the sliders and watch the answer, the picture and the verdict change together.
₹2 of cash a year for every ₹100 you pay for the share.
- Dividend per share
- The rest
Each dot is 1 of every 100 in “share price”.
Rough guide
- Low
- Moderate
- High
What's a good number?
- Low
Up to 1%
- Moderate
1% to 3%
- High
Above 3%
Fast-growing companies often pay little and reinvest their profit instead. That can be better for you over time.
Key number in the sector guides for IT services and FMCG.
How to read it
Good signs
- A dividend that rises steadily over the years.
- Paid out of profit, with plenty left to reinvest.
Watch out for
- A very high yield can mean the share price has crashed, and the dividend may be cut next.
- Dividends paid with borrowed money.
Read it with
For learning only. Example companies are made up, and the rough guides are rules of thumb, not targets. Nothing here is advice to buy or sell any stock.