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Dividend Yield Calculator

Calculate dividend returns and income potential from dividend-paying stocks

Sum of all dividends declared in the last 12 months

Enter to calculate your total dividend income

Dividend Yield

4.00%

Good yield - Quality income stock

Annual Income

₹4000.00

100 shares × ₹40

Monthly Income

₹333.33

Passive income per month

💡 Dividend Yield Benchmarks

3-4%: Conservative dividend stocks (utilities, REITs)

2-3%: Quality large-caps (banks, FMCG)

1-2%: Growth-focused companies

>8%: High risk - verify sustainability

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Disclaimer

This calculator is for informational and educational purposes only. It does not constitute financial or investment advice. Consult with a qualified financial advisor before making investment decisions.

What is Dividend Yield Calculator?

The Dividend Yield Calculator helps income-focused investors evaluate the annual dividend return as a percentage of the stock price. Dividend yield is calculated by dividing annual dividends per share by the current market price. It's a key metric for income investors, retirees, and those seeking passive income from their investments. This calculator can determine dividend yield, fair price for target yield, or required dividend for a target yield.

How to Use This Calculator

  1. Select calculation type (Yield, Fair Price, or Required Dividend)
  2. Enter current market price of the stock
  3. Input annual dividend per share (sum of all dividends in a year)
  4. For portfolio analysis, enter number of shares owned
  5. View yield percentage and projected annual income

Formula Used

Dividend Yield = (Annual Dividend per Share / Current Market Price) × 100 Annual Income = Annual Dividend per Share × Number of Shares Fair Price for Target Yield = Annual Dividend / (Target Yield / 100) Required Dividend = Market Price × (Target Yield / 100)

Example Calculation

Example: Analyzing ITC for Income Current Market Price: ₹450 Annual Dividend: ₹13 per share Shares Owned: 500 Dividend Yield = (13 / 450) × 100 = 2.89% Annual Income: = ₹13 × 500 = ₹6,500 per year = ₹541.67 per month If you want 4% yield: Fair Price = ₹13 / 0.04 = ₹325 (Stock would need to fall to ₹325 for 4% yield) Or company needs to pay: Required Dividend = ₹450 × 0.04 = ₹18 per share

Frequently Asked Questions

What is a good dividend yield?

A yield of 3-6% is generally considered good for stable companies. Yields below 2% indicate growth stocks, while yields above 8% may signal financial distress (dividend trap). Always verify dividend sustainability by checking payout ratio and cash flows.

Is higher dividend yield always better?

No. Extremely high yields (>8-10%) can be red flags indicating: (1) Stock price has crashed due to business problems, (2) Dividend may be cut soon, or (3) Unsustainable payout ratio. Always investigate the reason behind unusually high yields.

How is dividend yield different from returns?

Dividend yield only measures income from dividends. Total return includes both dividend yield AND capital appreciation (stock price gain). A stock giving 3% yield plus 10% price appreciation delivers 13% total return.

Are dividend stocks good for retirement?

Yes! Dividend stocks provide regular income without selling shares, making them ideal for retirees. Look for companies with 10-20 year dividend growth track records (Dividend Aristocrats). Target a diversified portfolio yielding 4-6% overall.

Do I have to pay tax on dividends?

Yes. In India, dividends are taxed at your income tax slab rate since April 2020. TDS at 10% is deducted if annual dividend exceeds ₹5,000. You can claim TDS credit when filing returns. Consider this tax impact when calculating post-tax yield.

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