What is a Dividend in the Stock Market?

A dividend is a distribution of a company’s profits or accumulated reserves to eligible shareholders. Generally, a company declares dividends as a fixed amount per share. For example, 

• Suppose a company declares a dividend of ₹8 per share and an investor holds 500 shares.
• Now, the dividend received would be ₹4,000 (500 shares × ₹8 per share).

What is Dividend Yield in Indian Stocks?

Dividend yield measures the dividend paid relative to the stock’s market price. Mathematically, it is calculated using the following formula:

• Dividend Yield = Annual Dividend Per ShareMarket Price Per Share x 100

For example, suppose a stock pays ₹10 in annual dividends and trades at ₹200. Now, the Dividend Yield would be 5%.

It is worth mentioning that the dividend yield in Indian stocks varies substantially across companies and sectors. Also, a high dividend yield does not automatically indicate a stronger investment proposition.

• The yield can increase because of a higher dividend, but it can also rise when the share price falls. 
• Similarly, a low yield may reflect a company retaining more earnings for expansion rather than distributing them.

Thus, traders may perform a complete “dividend analysis” by considering the company’s dividend history, payout ratio, and EPS (earnings per share), rather than only analysing the dividend yield.

Analyse Dividend Stocks Beyond Yield!

Dividend yield is only one part of dividend analysis. Trade246 gives you advanced tools to study price movements alongside other market information. Access TradingView charts, 100+ technical indicators, and professional drawing tools for deeper stock analysis.

Register today and track real-time market prices across NSE, US Stocks, and Indices. You can also use our “pre-trade calculators” to assess margin and other trade parameters before placing an order.