By VestAI Research | Last updated: March 2026
Dividend Yield: Meaning, Definition & Indian Stock Market Examples
Annual dividend per share ÷ stock price — income return from holding a stock.
What is Dividend Yield?
Dividend Yield = Annual Dividend Per Share ÷ Current Stock Price × 100. It represents the income an investor earns from dividends relative to the stock price. High-yield stocks are attractive to income-focused investors, particularly in low-interest-rate environments.
Dividend Yield — Indian Stock Market Example
Coal India has historically offered dividend yields of 6–9%, making it popular with income investors. PSU companies like NTPC and Power Grid often yield 3–6%. Growth companies like Zomato or Nykaa pay no dividends, reinvesting all profits into expansion.
Analyse any Indian stock using Dividend Yield
Ask Orion: “What is the Dividend Yield for [stock] and how does it compare to peers?”
Analyse with OrionFrequently Asked Questions about Dividend Yield
Is high dividend yield always good?
Not necessarily. High yield can result from either a high dividend or a falling stock price. A stock whose price has dropped 50% will show a high yield even if dividends are unchanged. Always check if the dividend is sustainable — covered by FCF and earnings.
How is dividend taxed in India?
Dividends received are added to your total income and taxed at your applicable income tax slab rate (after the 2020 DDT abolition). TDS of 10% is deducted if total dividend from a company exceeds ₹5,000 in a year.
Related Terms
Dividend
Cash distribution from company profits to shareholders.
Free Cash Flow
Operating cash flow minus capex — actual cash available after maintaining business.
Earnings Per Share
Net profit divided by total shares — profit attributable to each share.
Share Buyback
Company repurchasing its own shares — reduces share count, increases EPS.
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