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High Dividend Yield Stocks

Definition of High Dividend Yield Stocks

High Dividend Yield Stocks are shares of companies that generate above average dividends on top of regular market-based returns. These shares are known to be valued highly because they generate passive income as well as capital gains.

Related Terms

Free Cash Flow

Free float market capitalization is the market cap of a company based on the total freely available publicly traded outstanding shares. The formula to calculate free float market capitalization is:

Free float market capitalization = Share Price x (Number of Shares Available for Trading – Private and Locked-In Shares)

When calculating the free float market cap of a company, the number of shares held privately or the shares that are locked-in are not taken into account. Typically, these shares are held by promoters and the government.

Contract Note

A contract note is a compilation of all the trades and transactions made through a stockbroker on a stock exchange. It is a legal record that all recognized stockbrokers must send to traders and investors at the end of each trading day.

Equity Market

The Equity Market is a place where shares are traded, money is raised, and stock is offered to investors. That's why it is divided into two categories:

  • Primary Market: An equity market where shares are offered to investors for the first time through IPOs while fundraising also happens through private placements.
  • Secondary Market: An equity market where shares, bonds, futures, options, more are traded

The primary market is typically over the counter but may be regulated in the case of exchange traded IPOs. The secondary market is often well-regulated as most securities listed are exchange traded.

Assets

An asset is anything that has economic value and is owned by an individual, company, or group. Assets are bought to generate returns in the future.

Delivery Date

The delivery date of a cash or derivative contract refers to the final day and time on which the underlying asset should be delivered to the contract holder to fulfil the terms and obligations of the contract.

Differential Voting Rights

Differential Voting Rights or DVRs are special types of shares that carry more or less voting rights, depending on the issuing company. For example, a DVR share that carries less than usual voting rights may generate relatively high dividends.

A publicly traded company that wants to issue DVR shares must go through a postal ballot. There are other caveats as well. But broadly speaking, a company must have a healthy finanical track record if they want to issue DVR shares.



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