D

Glossary · PSX term

Dividend yield.

Dividend yield shows annual dividend income as a percentage of the current share price. It helps PSX investors compare income from different stocks, but it should be reviewed with payout history, earnings quality, and whether the dividend is sustainable.

Definition

The basic formula is annual dividend per share divided by current share price. A high yield can mean strong income, but it can also happen when a share price has fallen.

Worked example

If a company pays Rs. 10 per share in annual dividends and trades at Rs. 200, its dividend yield is 5%.

Related on PSX Clarity

Ex-dividend date

Earnings per share

More glossary terms

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Debt-to-equity ratio

Debt-to-equity ratio compares a company's borrowings with shareholder equity. It helps investors understand leverage and balance-sheet risk.

Delisting is the removal of a company's shares from trading on the exchange.

Dilution is the drop in each existing share's ownership when a company issues new shares.

Day trading is buying and selling the same stock within a single trading session.

Deliverable futures

Deliverable futures are PSX contracts where actual shares are delivered when the contract expires.

Disclosure is a company's duty to publicly share information that could affect its share price.

Dividend discount model

The dividend discount model values a stock as the present value of its expected future dividends.

Discounted cash flow (DCF)

DCF values a company by estimating its future cash flows and discounting them to today's value.

The discount rate converts future cash into today's value, reflecting time and risk.