Today we will learn about Dividend and Dividend Yield.
A dividend is a portion of profits that it pays out to all the shareholders. A company can choose to pay dividends or re-invest the entire profit for more growth.
Dividend yield on the other hand is more important for us
If we invest 1 lakh in stock and the Dividend yield is 5% — it means in the last 1 year, the company had paid out 5% of 1 lakh as a dividend
= 5000 rupees
example. ONGC dividend yield= 3.97% which means it paid out 3970 for every 1 lakh worth of shares you held.