Dividend Yield

Explanation: Dividend yield is a measure of the return on investment in a stock through dividends. It indicates the percentage of a company’s stock price that is paid out annually to shareholders in the form of dividends. Dividend yield is calculated by dividing the annual dividend per share by the current market price per share and then multiplying by 100 to express it as a percentage. A higher dividend yield typically indicates a higher return on investment from dividends.

Example: TCS had a dividend yield of 2.81% as of FY23, which means that for every rupee invested in TCS’s stock, investors received approximately 2.81 paise in dividends annually. This indicates that TCS distributed around 2.81% of its stock’s market price as dividends to its shareholders during the fiscal year. Dividend yield is an important metric for income-oriented investors seeking steady income from their investments, as it provides insight into the dividend-paying capacity of a company relative to its stock price.

You can view the Dividend Yield value for any company on Radar under Efficiency Ratios in the Ratios section.