Welcome to Financepenny blogs, we will discuss on best dividend-paying stocks in India. And also we will know what is dividend and dividend yield.
When the company earns its profits, the company distributes its profit share with the shareholders and is called a dividend. But it is not so, if the company has given dividend in the past, then it will also be given next time. Whether to give dividends or not, it is in the hands of the Board of Directors of the company.
Which companies gives best dividends?
Most of the companies which are new or companies that want to expand their business, these companies give a very little amount of dividend or sometimes didn’t pay dividends to their shareholders. And those companies which are making good profits and they have greatly expanded the business, and mature companies give more dividends to their shareholders.
It depends on your investment, how you wish to make a profit, from stocks gaining or most profits only from dividends. It is not that the companies that are not distributing the dividend now will not share profit in the future. Rather, if you have invested in undervalued stocks at a good valued price, that company can give you two profits in the future. Like, Stock price rise and After the company has grown very well, getting a dividend from the company.
Two Benefits of growing Companies :
For example, if you have bought the shares of a company for 50 rupees and after some time its price has increased to 500 rupees, then you will get a profit of 450 rupees behind every share. And when the company starts making good profits, and the expands business a lot, then it can also distribute good dividends, and you will also get good benefit from that.
When and how we get dividend:
We know that a mature and profitable company gives more dividend. So we have to pick stocks that earn a good profit, having good fundamentals, and have been giving good dividends. There are some dates that we should keep in mind.
Record Date: Record date is a day your name as a shareholder should be on the company’s list of shareholders. The dividend-paying company publicly announce a record date. If your name is not in the list of shareholders on the record date, then you will not get the dividend.
Ex-Dividend Date: Ex-Dividend date is one day before the record date. When the company announces a record date, the ex Dividend date will set the one day before of the record date. If we want the dividends of a company, then we have to buy stocks before the ex-dividend date.
Each stock has two values; one is the face value, and other is market value. The company’s dividend paid at face value.
For example, STAR named company listed in the market, and its stock price is 1000 rupees and face value is 10 rupees. The company declared a dividend of 200%. Means Star Company is giving a 200% dividend on its face value. In the picture, you can see how to calculate that. Face Value x Dividend/100
What is Dividend Yield?
That shows how much dividend the company pays against the market value of its shares. And it is also used to compare the dividend-paying stocks. If the dividend yield of a stock is high, then you have to check that due to the higher dividends given by the company or Due to the falling stock price. Sometimes, the dividend yield shows higher due to the stock price falls.
The Formula is Dividend per share/Market price Per share*100
Invest wisely in high dividend paying stocks:
It is not a matter if the company is giving good dividends to its shareholders, then that company will perform well in future. See, you cannot invest in stocks just by looking at dividends. Further analysis has to be done in fundamentals. Sometimes, some of the fundamentals of the company not very well due to which the stock price falls significantly.
|Name||Dividend yield||Market Cap||FACE VALUE|
|TV Today Network Ltd.||9.66||1235||5.00|
|Balmer Law. Inv.||8.66||871||10.00|
|Guj Pipavav Port||6.77||4000||10.00|
|O N G C||6.34||99258||5.00|