1. Equity investments generate two types of returns— capital appreciation through price movements and regular income through dividends.
2. Dividends are a common way for a company to share its profit with the shareholders.
3. Dividend yield shows how much a company pays out in dividends each year relative to its market price.
4. High dividend yields are typical of mature, stable and high cash flow-oriented companies.
5. High dividend-yielding companies are less volatile than the market.
(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
