Glossary · Investing Basics
Yield
The income generated by an investment over a period, expressed as a percentage of the investment's cost or current market value. Dividend yield and bond yield are the most commonly referenced forms.
01—What is Yield?
The definition — and what it means in practice.
Yield is the income an investment generates over a period, expressed as a percentage of the investment’s cost or its current market value. For shares, it commonly refers to dividend yield (cash dividends relative to the share price). For fixed-income securities, yield describes the income and price effects implied by coupon payments and the security’s market price, with measures such as current yield and yield to maturity used in practice.
Yield matters because it helps you compare income potential across different investments and prices. A share with the same cash dividend can have a higher or lower yield depending on its market price, while bond yields can move as prices change. Yield is not the same as total return: capital gains or losses, taxes, and changes in market value can materially change what you actually earn.
If a share pays Rs 10 in dividends and trades at Rs 200, its dividend yield is 5% (Rs 10 ÷ Rs 200).
Dividend Yield = Annual Cash Dividend per Share ÷ Current Share Price
Use the expected annual dividend per share; share price is the current market price.
- Yield measures income as a percentage of cost or current market value, not the absolute rupee amount.
- Dividend yield is most used for shares; bond yield measures are used for fixed income.
- Yields change when prices change, even if the cash income stays the same.
- Yield is only one part of performance; total return also includes price gains/losses and costs.
02—How yield works on the PSX
The Pakistan-specific rules, conventions, and numbers.
On the Pakistan Stock Exchange (PSX), investors most often encounter yield through cash dividends on listed shares. Many companies declare dividends as a percentage of face value; for example, a “100%” dividend means Rs 10 per share where the face value is Rs 10. Dividend yield then depends on the share’s market price, not the face value, so the same declared dividend can imply different yields for different prices.
Because PSX shares are held electronically at the Central Depository Company (CDC) and trades clear through the National Clearing Company of Pakistan Limited (NCCPL), dividend-related dates and entitlements are handled through the market’s normal settlement process. In practice, investors also consider withholding tax on cash dividends, which differs for income-tax filers and non-filers, when thinking about the income they will actually receive.
03—Common misconceptions
Where investors most often get this wrong.
A high dividend yield means a share is always a better investment.
High yield can reflect a low share price, which may be due to higher risk or uncertainty. Total return also depends on price movement, sustainability of dividends, and costs and taxes.
Dividend yield is the same as the dividend percentage the company announces.
The announced percentage is typically based on face value, while dividend yield is based on the market price you pay. The two can be very different.
Yield tells me exactly what I will earn.
Yield is a ratio based on assumptions (such as future dividends or holding to maturity for bonds). Actual outcomes can differ due to price changes, dividend changes, and taxes.
04—Using yield on BSL
Where this term shows up across the platform — with live data.
- Find income-focused shares using the Highest Dividend Yield list.
- Check upcoming dividend-related timing via Ex-Dates.
- Review a company’s dividend announcements and history on Board Meetings.
- Compare dividend payers across industries using Sectors.
05—Frequently asked questions
What investors ask about yield on the PSX.
Frequently Asked Questions
Yield is the income from an investment over a period, shown as a percentage of what you paid or its current market value. On shares, it is often dividend yield; on fixed income, it is measured using bond yield concepts.
Dividend yield is calculated by dividing the annual cash dividend per share by the current share price. If dividends are irregular, investors may annualise the latest dividend, but the result is still sensitive to the share’s market price.
No. A “100% dividend” is commonly a percentage of face value (often Rs 10), meaning Rs 10 per share. Dividend yield depends on the share’s market price, so the yield will be Rs 10 divided by the current share price.
No. Yield focuses on income (such as dividends) relative to price. Total return includes both income and any change in the investment’s market value, minus relevant costs and taxes.
Withholding tax is applied to cash dividends and differs for income-tax filers and non-filers. That means the cash received can be lower than the declared dividend, so an investor may consider a after-tax yield rather than the headline yield.
06—Related terms
Keep building the picture.
Annual dividend per share divided by the current share price, expressed as a percentage. A useful metric for income-focused investors is to compare dividend yields across different stocks.
A direct payment made by a company to its shareholders, usually from profits, expressed as a rupee amount per share. Subject to withholding tax in Pakistan.
A fixed-income instrument representing a loan made by an investor to a borrower, typically a government or corporation. The borrower pays periodic interest and repays the principal at maturity.
The annual income from a security divided by its current market price, expressed as a percentage. Useful for comparing income return across different fixed-income or dividend-paying securities.
The total return an investor would earn on a bond if held until its maturity date, accounting for all coupon payments and the difference between the purchase price and face value. The most comprehensive measure of a bond's return.
A tax deducted at source on dividends and other income in Pakistan. For tax filers, the withholding tax on dividends from listed companies is currently 15%. Non-filers face a higher rate.
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