TL;DR
Dividend yield is the ratio of a stock's annual dividend payment to its market price, making high-yield stocks attractive to income investors. For example, if a stock is priced at 100 TL and pays a 5 TL dividend, the dividend yield is 5%.
10 min readHow to interpret dividend yield and payout ratio. How to select sustainable dividend stocks.
Dividend Yield and Payout Ratio
This metric is a key component of fundamental analysis. It should be evaluated alongside the P/E ratio and P/B ratio.
How to Calculate
See our financial statement analysis guide for calculation details. Stock valuation methods use this metric alongside other measures.
Application on BIST
Filter by this metric in Borsafolio's stock screener. Each stock detail page provides quarterly financials and comparative metrics.
Screen BIST stocks by financial metrics.
Open Stock Screener →Related articles: Fundamental Analysis Guide, P/E Ratio, P/B Ratio, Financial Statements.
Frequently Asked Questions
What is dividend yield?
Dividend yield is the ratio of a stock's annual dividend payment to its market price. For example, if a stock is priced at 150 TL and pays a 6 TL dividend, the dividend yield is 4%.
How is dividend yield calculated?
Dividend yield is calculated by dividing the annual dividend payment by the stock's market price and multiplying by 100. For instance, for a stock priced at 120 TL with a 10 TL dividend payment, the calculation would be: (10 TL / 120 TL) * 100 = 8.33%.
What is the payout ratio?
The payout ratio shows how much of a company's net profit is distributed as dividends. For example, if a company has a net profit of 1,000,000 TL and distributes 400,000 TL as dividends, the payout ratio is 40%.
How is the payout ratio calculated?
The payout ratio is calculated by dividing the distributed dividend amount by the net profit and multiplying by 100. For example, if a company has a net profit of 5,000,000 TL and pays 1,000,000 TL in dividends, the payout ratio would be 20%.
What is the relationship between dividend yield and payout ratio?
Dividend yield and payout ratio typically have an inverse relationship. A high dividend yield may be associated with a low payout ratio, indicating the company is reinvesting a large portion of its profits.
This content does not constitute investment advice. Past performance is not a guarantee of future results. Make your investment decisions based on your own risk profile.
