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800k Impressions | Co-Founder at Prime Wealth Finserv. Helping High Net Worth Individuals with their Investment Needs QPFP®️ Qualified Personal Finance Professional®️ CWM®️ from American Academy of Financial Management

Dividend Yield vs Dividend Payout vs Dividend Rate When investing in stocks, one of the exciting aspects is the potential to receive dividends. Let's break down these concepts Stock Price: Rs 350 FY24 Dividend Declared: Rs 10.5 Face Value: Rs 10 FY24 Earnings Per Share: Rs 70 Dividend Yield This metric shows what you earn on your investment in terms of dividends. It's calculated based on the market price you pay for the stock. For our example: Dividend Yield=(Dividend Per ShareStock Price)×100 =(10.5350)×100=3% This means, as an investor, you are earning about 3% of your stock purchase price back as dividends. Dividend Payout This figure indicates how much of its profit a company is distributing to shareholders as dividends. Dividend Payout=(Dividend Per ShareEarnings Per Share)×100 =(10.570)×100=15% In this scenario, the company is distributing 15% of its earnings to shareholders, retaining the remaining 85% for reinvestment in business growth. This balance can show how a company views its growth opportunities; companies with fewer growth opportunities might opt to distribute more of their profits as dividends. Dividend Rate Often quoted by companies but less meaningful for investors and analysts, this is calculated as: Dividend Rate=(Dividend Per ShareFace Value)×100 =(10.510)×100=105% The dividend rate here is 105%, but as mentioned, this number isn't particularly useful for evaluating the quality of an investment since it doesn’t provide insight into the returns relative to the stock price or earnings. In conclusion, when analyzing stocks for investment: - Dividend Yield provides a clear picture of what percentage of the purchase price is returned as dividends, helping gauge the immediate return on investment. - Dividend Payout helps understand how much of its profits a company is giving back to its shareholders versus how much it is reinvesting. Follow Chakravarthy V for more insightful posts on #personalfinance, #wealthmanagement and #investing.

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Rahul Jain

Investor and Founder Rahul Jain Capital ( Pvt Equity Fund )| 'Desh Ratna' & 2 more National award Winner 🇮🇳| Converted startup into First IPO in 2013 | EX-CEO turned VC of a fortune 500 company

5mo

Thank you for clearing the doubts sir!

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Raj Sanghvi

Top 1% LinkedIn | PGDM'25, Great Lakes | Finance | Content Strategist | Management | Risk | Equity Research | Glim C (2023-2025)

5mo

This breakdown of dividend metrics offers a clear and crisp understanding of the same!

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Janmeyjai Bisht

Internal Audit | North-India Concurrent Credit Audit | An Independent Equity Research Analyst | Contemplation on Finance and Philosophy |

5mo

Great share sir

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Karthik Nagaraj

JPMorgan Chase & Co | Investment Banking | Valuations | Financial Modelling | 7M+ Impressions

5mo

Well shared

Vinayak Jadhav

🎓 Certified Microsoft Power BI Data Analyst Associate🎓 Certified Microsoft Office Specialist⚡ Non IT Professional Driving Digital Transformation ⚡️ Generate your several Income sources

5mo

This article clearly explains the difference between dividend yield, payout, and rate. For investors, yield (return on investment) and payout (profit sharing) are most important. Dividend rate is less useful because it doesn't consider stock price. Thank you Chakravarthy V

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Mohit Sardana

CA | LinkedIn Top Voice’24 | Valuations | Finance Navigator | Blogger

5mo

You really explained well these terms >

SANTU SAHA

Co-Founder at Stocks Explore | Stock Market Trader | Passionate About Financial Analysis and Strategy | RA NISM Certified

5mo

Great breakdown, Chakravarthy V! This really clarifies the different dividend metrics and their significance for investors. Thanks for sharing!

Dr. Haider Abbas

Co-Founder & COO I Solarad.ai I Solar Power Forecasting

5mo

Good point Chakravarthy V

Zorgan Vignesh 🧙🏾♂️

Founder - AutoScaler AI | 🔮 6 & 7 figure experts come to me to add consistent $100k/m selling out their coaching programs & info-products via automated funnels, viral content systems & "market-ready" high ticket offers

5mo

How do you typically weigh dividend yield vs. growth potential when making investment decisions? Chakravarthy V

Gaurav Kothiyal

Internal Auditor | MBA (Finance) | Content Creator | NISM Certified | Personal Finance and Investing

5mo

Very helpful! Chakravarthy V

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