What is Dividend Yield?
What is Dividend Yield?
DIVIDEND YIELD is a financial ratio that shows the dividend earning potential of a stock. And thus the dividend yield tells the investor the relationship between a stock's ability to earn dividends and the market price of its share.
For example, suppose if INFOSYS company whose stock price is Rs 5, and the market value is Rs 800 per share.
And INFOSYS declares 200% dividend.
This would mean a dividend from Infosys, 200% of the face value of the share = Rs.10.
And if we talk about DIVIDEND YIELD, then we have to divide the dividend value of the share by the market value.
in such a way
Dividend yield of INFOSYS share will be = (10/800)*100 = .0125 X 100 = 1.25%
And so the dividend yield of INFOSYS will be = 1.25 % .
DIVIDEND ANNOUNCEMENT DATES
When a company declares the dividend, the dividend is not paid immediately, but there are four major dates between the declaration of the dividend and the payment of the dividend, and the payment of the dividend takes place on the last date itself.
Important Dividend Dates
When a company announces the DIVIDEND, the dividend is not given immediately, but there are four major DATES between the declaration of the dividend and the payment of the dividend, and the payment of the dividend is on the last date. Important Dividend Dates to Receive Dividends. Date is as follows -
1) Dividend declaration date- It is the date on which the company declares the dividend to its share holder.
2) Last Cum - dividend date / .Ex-Dividend date - This is the date, Which is the last date, after this date if someone has bought the stock or shares, then they will not get the dividend, if you want to get the dividend of stock, then you have to buy that stock before this last cum - dividend date.
3) Date of record or Record date - This is the date on which the company sees it in its record books, which people have shares of their shares, the name of the people who remain in the company's record book on this date. They are entitled to get the dividend of the share.
4) Date of Dividend Payment - This is the date when the company actually pays the dividend.
BENEFITS OF DIVIDEND
Some of the major benefits of dividends are as follows
➤ The dividend is a fully PASSIVE INCOME, and a balanced investment portfolio includes dividend income as well.
➤ There is no difference in the share price of a company on its dividend in the market, if the company wants to pay a dividend, then it pays it on the face value of the share.
➤ The dividend is like a fixed income, big established, and years old company often keeps paying dividends at a fixed time.
How to check dividend-paying company
You can check the dividend by searching it on the internet or by visiting the company's website or MONEY CONTROL's website from the link given below
➤ Moneycontrol.com Link
Things to keep in mind regarding DIVIDEND
➤ The dividend is given out of the AFTER TAX PROFIT of the company.
➤ Note that dividends are paid out of profit, and therefore if the company does not make a profit in any year, then the company is in a position not to pay dividends, but still the company wants dividends from the reserve cash fund of its old profits. may declare.
➤ If a company is giving REGULAR DIVIDEND, it means the company is making a REGULAR profit, and the company is financially strong.
➤ There is no legal binding on the company to pay dividends, it is decided to give or not to pay the dividend with the consent of the board of directors of the company.
➤ The dividend is usually paid annually, and large companies pay it quarterly as well.
➤ Dividend income is around 2 to 3 percent annually or around it.
What Is Dividend (in Details)?
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