Why is it important

Dividend yield is a ratio which is very important to make a decision for a company if you want regular income every quarter(4months) or to keep an eye on company’s profit flow.

Dividend Yield Percentile

Meanwhile the average dividend yield to be expected by a company is about 2% , now whether it belongs to any industry.

To be more precise according to the different sectors:

Healthcare : 2.5%

Material : 5.0%

Industry : 5.0%

Financial : 4.5%

Technology : 3.5%

Service : 2.5%

Utility : 4.0 %

Formula to calculate yield

Dividend per share/ Market share of a company

Suppose if a company x’s stock is trading at a price of rs1400 or 20$ roughly and giving a dividend of rs 100 or 1.5$ per share then the would be 6% .

Also, You have to keep one thing in mind that you have to calculate the whole dividends which are given throughout the year , like if a company has given 100rs dividend in the first quarter of the year and then after that it has given like 100,120,80 in the remaining quarters, eventually it will become rs 400 dividend throughout the year.

In the case of company x we have rs 400 or 5.4$ dividend then : 400/1400 =0.28 which 28% dividend .