Results for “Dividend Yield”
10 terms
Dividend Yield
Corporate Actions, Dividends & Governance
%
The annual dividend per share expressed as a percentage of the share price.
Dividend Yield = Annual Dividend per Share / Market Price per Share x 100
Dividend Trap
Corporate Actions, Dividends & Governance
qualitative
A share whose high dividend yield reflects a falling price and an unsustainable payout rather than attractive income.
Test: the yield is elevated because the price fell, and the dividend exceeds free cash flow or is funded by borrowing
Benchmark
Risk & Portfolio Management
%
The index or standard against which a portfolio's performance is measured.
Excess Return = Portfolio Return - Benchmark Return over the same period
Dividend per Share
Corporate Actions, Dividends & Governance
₹
The total dividend declared for a period divided by the number of shares outstanding.
Dividend per Share = Total Dividend Declared / Number of Shares Outstanding
Earnings Yield
Fundamental Analysis & Valuation
%
Earnings per share expressed as a percentage of the share price — the inverse of the price-to-earnings ratio.
Earnings Yield = Earnings per Share / Market Price per Share x 100 = 1 / P/E x 100
Equity Risk Premium
Risk & Portfolio Management
%
The additional return investors require for holding equities rather than the risk-free asset.
Equity Risk Premium = Expected Market Return - Risk-Free Rate
Special Dividend
Corporate Actions, Dividends & Governance
₹
A one-off dividend, usually much larger than the regular payout, arising from an unusual event.
Test: the dividend is explicitly designated as non-recurring and is not part of the stated dividend policy
Total Return Index
Funds, ETFs & Index Investing
index points
An index variant that assumes dividends are reinvested, so it measures the full return from holding the constituents.
Total Return = Price Return + Dividend Yield, compounded over the period
Value Trap
Fundamental Analysis & Valuation
qualitative
A share that looks cheap on backward-looking multiples but is cheap because its business is deteriorating.
Test: the low multiple is explained by declining earnings power rather than by temporary pessimism, so the multiple stays low as earnings fall
Dividend Stock
Market Basics & Instruments
qualitative
A share of a company that distributes a substantial and reasonably reliable portion of its profits as dividends.
Test: a sustained payout ratio and dividend yield materially above the market average, supported by free cash flow