A dividend is a distribution of a slice of the company’s earning (net profit) which is decided by the board of directors for its shareholders. Dividends are usually issued as payments, shares or stockor as property dividend (property dividend can either include shares of a subsidiary company or any physical assets owned by the company such as inventories, equipment or real estate).
Companies which makes more profits will pay higher dividend to investors. Top companies tend to increase its profit over time, as profits grows, the dividend payment by the companies increases as well.
Mostly large and well-established companies give a decent dividend to their shareholders. Sometimes, they even give the dividend twice in a year (interim dividend and final dividend). Even this is not a hard and fast rule some companies give dividend three times in a year.
When you choose a strong company, whether a bad market or slowdown or recession, nothing stops such companies from giving dividend to their shareholders.
Here are some of the best dividend stocks in India:
PAT (Profit after Tax): 6,805
Dividend (5-years Average): 7,411
Dividend Pay-out: 108.91%
Dividend Yield Average (Last 5 years): 9.29%
PAT (Profit after Tax): 1,313
Dividend (5-years Average): 6,513
Dividend Pay-out: 495.93%
Dividend Yield Average (Last 5 years): 12.72%
PAT (Profit after Tax): 2,683
Dividend (5-years Average): 2,681
Dividend Pay-out: 106.64%
Dividend Yield Average (Last 5 years): 5.46%
PAT (Profit after Tax): 138
Dividend (5-years Average): 548
Dividend Pay-out: 396.48%
Dividend Yield Average (Last 5 years): 7.57%
PAT (Profit after Tax): 240
Dividend (5-years Average): 378
Dividend Pay-out: 157.72%
Dividend Yield Average (Last 5 years): 2.54%
GIC of India
PAT (Profit after Tax): 359
Dividend (5-years Average): 437
Dividend Pay-out: 121.76%
Dividend Yield Average (Last 5 years): 2.35%
PAT (Profit after Tax): 726
Dividend (5-years Average): 1355
Dividend Pay-out: 186.61%
Dividend Yield Average (Last 5 years): 0.78%
As you could see on the above-mentioned companies, the average of Dividend Pay-out is high.
Identifying and purchasing best dividend paying stocks and holding them for long term is the ideal thing to do. Consistent dividend pay-out and consistent growth in dividend paid are some criteria which makes a stock “best” dividend stock.
But for such stocks, in short term, yield of dividend stock may be low, but in the long-term, dividend per share will improve and its dividend yield it will also go up.
Price of such dividend paying stocks are usually stable.
Famous American investor Warren Buffett earns millions in dividends.
The formula to identify potential dividend stocks is analysing the Profit and loss account of the company, Earnings Per Share(EPS should have raised in last 5 years) and dividend per share should have also increased in the last 5 years.
Also, reinvesting the earned dividends can further increase the yield.
You must systematically invest to accumulate dividend stocks and again reinvest the earned dividend from stocks for making more profit in Stock market.
If you find any mistake please contact the firstname.lastname@example.org. This article is general in nature. It does not constitute a recommendation to buy and sell any stock, and does not take account of your objectives, or your financial situation. Largecapindia has no position in the stocks mentioned. Largecapindia aim to bring you long term focused research analysis driven by fundamental thanks you.
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