What is Dividend Yield, Definition, Formula and Example.....

We want to invest in a company that provides good dividends. It is important to understand the concept of Dividend Yield.

Dividend Yield helps us identify companies that offer substantial dividends.

So, what exactly is Dividend Yield?...

It is the percentage of a company's current market price that is paid out as dividends to its shareholders.

Let's take an example to understand this better. Suppose a company has a market price of $200, and it pays out $20 as dividends to its shareholders. In this case, the company's Dividend Yield would be 10%. This means that the company is paying out 10% of its market price as dividends.

Calculating Dividend Yield is simple. We divide the dividend amount by the market price of the company. In our example, the calculation would be:

Dividend = $20 Market price = $200

Dividend Yield = Dividend / Market price

$20 / $200 = 0.1 = 10% Dividend Yield

Now, let's talk about how we can use Dividend Yield...

As mentioned earlier, Dividend Yield helps us choose companies that offer higher dividends.

For instance, if one company has a Dividend Yield of 10% and another company with similar dividends has a Dividend Yield of 15%, we can expect to receive a higher dividend return from the company with a 15% Dividend Yield.

This indicates that the company with the higher Dividend Yield might provide a better return on our investment.

However, it's important to note that we shouldn't solely rely on Dividend Yield when making investment decisions. It is just one factor to consider.

In addition to Dividend Yield, we should also examine other factors such as the company's PE Ratio, Profit Rate, Credit, EPS, Market Value, and more.

To summarize, Dividend Yield is a useful metric for selecting companies that offer good dividends. By considering the Dividend Yield along with other factors, we can make more informed investment decisions..

Comments

BLUE Chip Companies , Blue chip Fund....

When we are searching for the best investment opportunity, we often come across the term "BLUE CHIP FUND." We already have knowledge about regular companies and their stocks, but BLUE CHIP companies are somewhat different for us., Today , We will learn about BLUE CHIP companies and BLUE CHIP FUNDS. First, let's understand how the name "BLUE CHIP" originated... In some foreign countries, there is a game called POKER, which involves using chips of different colors. Among them, the blue chip holds the highest value. We can compare the stock market to the game of POKER, where the most valuable asset is the BLUE CHIP. Similarly, In the stock market, the most valuable companies are referred to as BLUE CHIP companies, hence the name. Next, let's delve into what BLUE CHIP companies are. A company is considered a BLUE CHIP company if it possesses the following characteristics: It has a higher market value and a strong reputation in the market. These companies are oft...

What is Mutual Fund and How it Works, Definition of Mutual Fund...

A mutual fund is a simple way to invest money. Instead of investing by ourselves, we give our money to a professional called a Fund Manager who knows a lot about investing. The Fund Manager takes care of our money and tries to make it grow by buying stocks, bonds, gold, and other investments. When we invest in a mutual fund, our money is combined with money from other people who are also investing in the same fund. This reduces the risk because the money is spread out and invested in different places. There are two ways to invest our money in a mutual fund. One way is to invest a large amount of money all at once. The other way is to invest a smaller amount regularly, like every month or every week. This is called a systematic investment plan (SIP). Mutual funds are a good option for people who aren't experienced or don't have time to manage their investments. The Fund Manager takes care of everything and tries to make our money grow.

The 80/20 Principle or Pareto principle...

Small things we do can make big changes in our lives. Today, we will learn about a rule that is related to this idea. This rule is called the 80/20 Rule. According to this rule, 80% of the results come from 20% of the actions. It was discovered by a person named Vilfredo Federico Damaso Pareto, so it is also known as the Pareto Principle. When he studied the world economy, he found that 20% of the people own 80% of the money in the world. He also found that 20% of his pea plants make 80% of the peas. Similarly, 80% of a company's profit comes from 20% of its customers. He saw this pattern in many situations, which led him to create the 80/20 rule or the Pareto principle. By using this rule correctly, we can achieve success. For example, let's say we feel very worried and there are 10 problems causing our anxiety. Out of these, 2 problems (20%) are responsible for 80% of our worry. If we find and solve those 2 problems, most...

2i Sight

Search This Blog