What is Dividend Yield?

Dividend Yield is the annual dividend as a percentage of current stock price. High-yield stocks generate income without selling shares. Indian companies pay dividends quarterly or annually. After 2020-21, dividends taxed at investor's slab rate (DDT removed). Use yield to compare income potential across stocks.

How to use

1. Enter annual dividend per share — Sum of last 4 quarterly dividends (TTM)
2. Enter current share price — Latest market price
3. Enter shares owned — To see your total income
4. View yield + annual income — Decision-making numbers

Formula

Dividend Yield (%) = (Annual Dividend per Share / Share Price) × 100

Total Annual Income = Dividend per Share × Shares Owned

Tips

• Compare yields across similar sector stocks
• Sustainable yield typically < 6% (very high may signal trouble)
• Look at dividend history — growing dividends signal healthy company
• ITC, HDFC Bank, ITC, ONGC, Coal India are popular dividend stocks
• Reinvest dividends for compounding growth

FAQs

How are dividends taxed in India?

At your income tax slab rate. TDS deducted at 10% if dividend > ₹5,000/year per company. Old regime: included in 'Income from Other Sources'.

Best Indian dividend stocks?

ITC (4-5% yield), Coal India (5-7%), ONGC, BPCL, HDFC Bank, Hindustan Unilever. Focus on consistent payers, not just highest yield.

Dividend vs growth stocks?

Dividend: regular income, slower price growth. Growth: reinvest profits, higher price appreciation. Mix for balanced portfolio.

What is dividend yield trap?

Stock with high yield (8%+) but falling business. High yield from depressed price. Verify earnings, debt, payout ratio before buying.

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