Dividend Yield Calculator

What is dividend yield and how the calculator works

Dividend yield tells you how much cash income a stock pays each year as a
percentage of its current price. It answers a simple question: for every ₹100 I
invest in this share today, how much will I receive in dividends over a year? This
dividend yield calculator works it out instantly from two inputs — the share
price and the annual dividend per share.

Dividend yield is the core metric for income investors comparing stocks. A ₹50
dividend means very different things on a ₹500 share (10% yield) versus a ₹5,000
share (1% yield), and only the yield makes them comparable.

How to calculate dividend yield — the formula

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

For example, a stock trading at ₹500 that pays ₹20 in dividends over the year has a
dividend yield of (20 ÷ 500) × 100 = 4%.

You can also calculate it at the portfolio level:

Portfolio Yield (%) = (Total Annual Dividends ÷ Total Market Value) × 100

Trailing vs forward dividend yield

• Trailing yield uses the dividends actually paid over the last 12 months.
  It's factual but backward-looking.
• Forward yield uses the expected dividend for the next 12 months. It's more
  relevant for decisions but relies on an estimate that may not hold.

When a source quotes "dividend yield" without saying which, it's usually trailing.
For banks and cyclical companies, the two can differ a lot.

How share price changes affect dividend yield

Yield moves opposite to price. If a company keeps its dividend fixed but the
share price falls, the yield rises — and vice versa. This is why a sudden jump in a
stock's dividend yield isn't always good news: it can mean the price has dropped
because the market expects the dividend to be cut. Always check whether a high yield
reflects a generous payout or a falling price.

Dividend yield vs total return

Dividend yield is only the income part of your return. Your total return also
includes capital appreciation (or loss) in the share price. A stock with a modest 2%
yield but strong price growth can easily beat a 6%-yield stock whose price is
stagnant. Use dividend yield to judge income, not overall performance.

Three things Indian investors get wrong about dividend yield

1. Chasing the highest yield blindly. An unusually high yield often signals a
   falling price or an unsustainable payout. Check the company's earnings and payout
   ratio first.
2. Ignoring dividend tax. In India, dividends are taxed at your income-tax slab
   rate (and TDS applies above ₹5,000 a year from a company). Your after-tax yield
   is lower than the headline figure.
3. Confusing dividend yield with dividend rate. The "dividend rate" companies
   declare is often a percentage of face value, not market price. Yield is always
   based on the current market price.

When to use this dividend yield calculator

Use it to compare income stocks, check a bank or PSU's yield, work out your whole
portfolio's blended yield, or convert a declared dividend into a yield you can
compare across the market.