Dividend Paying Stocks
It is said that high dividend paying stocks outperform the market in the long run. Stocks with high dividend yield are considered safe and also indicates that management is sharing profits with investors. However, we must also look at the consistency of dividends.
We must know that there are two ways to make money from equity stock market:
- Appreciation of Capital
- Income from Dividend
Appreciation of capital occurs from the timely variation in the prices of the stocks you trade while dividends are corporate earnings that companies provide to their shareholders at various times during the year.
Companies that pay high and consistent dividends can be said to be great companies. Everyone knows this.
Companies that pay inconsistent or low or no dividends cannot be said to be bad companies.
World’s most expensive stock (It cost more than one crore in INR) – Berkshire Hathaway of Warren Buffet don’t pay dividends at all.
This article tells you about the top 25 dividend-paying stocks in the Indian Stock Market.
|Highest Dividend Paying Stocks in the Indian Stock Market|
|COAL INDIA LTD.|
|IndiaBulls Housing Finance|
|Power Grid Corporation of India|
One important thing to know about dividends is that after the announcement of dividends, the stock price is reduced by the same amount as the dividend on ex-dividend date. Suppose there is a company XYZ, whose stock is trading at Rs 100 and a dividend of Rs 5 is announced. On the ex-dividend date the price would become Rs 95. It is not compulsory that it happens but generally it does happen. You should keep this in mind.
If you are wondering what is ex-dividend date, it is simply the date till which if you have the shares, you will be entitled for the dividend.
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