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To have a secure future in this uncertain world, it is essential to make investments. It is likely that you are aware of the high returns you can get by investing in a company over a long period. What other ways can you make money from investing in a business? Dividends, bonus, rights issue, etc. Other benefits that you may be eligible for include dividends, bonus and rights issue. You can buy shares in a company and then sell them after a few years depending on your goals and needs. Do a thorough study of the company before you invest Analyze the company’s balance sheet and future growth potential. To get a clear view of the financials of your company.
When choosing the right company, you need to be cautious. To make the right investment decision, it is important to monitor the company. The share price can be affected by many factors. It is important to keep up-to-date with all developments in the stock exchange. The share's value increases as the company grows. This article will explain what dividends are. So that you get regular dividends from your company, it is important to invest in stocks with high dividend yield.
Dividend refers to the cash that a company pays its shareholders out from its profits. A company can decide to reinvest its profits into business, as well as pay dividends. Dividends are determined by the board of directors and must be approved by shareholders. Dividends can be paid either quarterly or annually.
Dividend yield refers to the ratio of the dividend paid per share to its current price.
Dividend Yield = Cash Dividend per Share/Market Price of Share*100
Regular dividends are a sign of a financially sound business. Other terms to be aware of are ex date and record date. Record date - All shareholders who have shares in the company at that time are eligible to receive dividends. Ex dividend date - This is typically one day prior to the record date. You will not receive dividend if you buy shares on the ex date or later.
It's the share of net income that is distributed as dividends to shareholders. A company with a higher dividend payout ratio than 100% is not advisable as it can lead to unsustainable business.
Let's now look at the highest-dividend paying stocks.
Company Name | Sector | Dividend per Share (Rs. ** | Dividend Yield (%)** | Average Yield for 5 Years (%) |
---|---|---|---|---|
Castrol India Ltd | Chemicals | 6.6 | 3.2 | 2.5 |
Greaves Cotton Ltd | Machinery | 5.2 | 4.4 | 3.6 |
Hero MotoCorp Ltd | Automobiles | 102.2 | 2.8 | 3.1 |
Hindustan Petroleum Corp Ltd | Oil, Gas & Other Consumable Fuels | 16.7 | 4.7 | 4.9 |
Indiabulls Housing Finance Ltd | Thrifts & Mortgage Finance | 52.8 | 4.1 | 5.5 |
Infosys Ltd | IT Services | 33.5 | 2.9 | 2 |
The Karnataka Bank Ltd | Banks | 4.5 | 3.8 | 3.7 |
Power Finance Corp Ltd | Diversified Financial Services | 7.4 | 8.4 | 6.3 |
PTC India Ltd | Independent Power Trading | 4 | 4.3 | 2.9 |
VST Industries Ltd | Tobacco | 110 | 3.6 | 4.3 |