Dividend Yield vs. Dividend Payout: Key Differences

Understanding Dividend Yield & Payout Ratio

– Dividend Yield (%) – Measures dividend income relative to stock price.
Dividend Payout Ratio (%) – Shows how much profit is paid as dividends.

What is Dividend Yield?

– Formula: Dividend Yield = (Annual Dividend / Stock Price) × 100
– High yield doesn’t always mean a good investment.

What is Dividend Payout Ratio?

– Formula: Dividend Payout Ratio = (Dividends / Net Income) × 100
– A low payout ratio (30-60%) indicates sustainable growth.

Key Differences & What They Mean

– Dividend Yield helps compare stocks based on returns.
– Dividend Payout Ratio shows sustainability & growth potential.

Investment Insights

– Look for Companies Expanding Fiber Networks: Telecoms with a strong broadband presence will see sustained growth.
Monitor Subscriber Growth & ARPU: Higher broadband adoption leads to steady revenue