Dividend Yield, Dividend Payout, Dividend Rate - How to interpret these terms?

In this video, we decode 3 commonly used and misused terms, Dividend Yield, Dividend Payout, and Dividend Rate

We Decode with Canara Bank as an example

Stock Price - Rs 107
FY25 Dividend Declared - Rs 4
Face Value - Rs 2
FY25 Earnings Per Share - Rs 19.3

-Dividend Yield-
This is what you make on your investment. Since you are purchasing the stock at market price, this is calculated as
Dividend / Market Price

In our example, this will be 4/107
= 3.7%

-Dividend Payout-
How much the company is paying out of its profit as dividend.
Calculated as
Dividend / Net Profit or
Dividend Per Share / Earnings Per Share

Since dividend per share is 4 and Earnings Per Share is 19.3,

Dividend Payout is 4 / 19.3 = 21%

-Dividend Rate-
Probably the most meaningless number of the 3.
Yet most companies quote it.
Given by Dividend / Face Value.

In this case, Dividend Rate = 4 / 2 = 200%
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About the speaker in the video

Peeyush Chitlangia is the founder of FinShiksha.
An Alumnus of IIM Calcutta & MNIT Jaipur
CFA Charterholder
20 years Experience in the financial services
Extensive exposure to Equity Research, Investment Analysis & Financial Modeling, along with training.
Trained participants across organizations such as Kotak Mahindra Bank, JP Morgan, ICICI Prudential Mutual Fund, Avendus, 360 ONE WAM, o3 Capital, Spark Capital, Equirus, CRISIL, SBI AMC, Nippon Life Asset Management India, Motilal Oswal, Kotak Securities, Scripbox, Visible Alpha amongst others, and the top MBA institutes in India.
LinkedIn Top Voice!

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