History says that high dividend paying stocks outperform the market in long run. When I ask people to invest in this category of stocks, they just look at me with amazement. What they like more is capital appreciation. Generally, people underestimate the power of dividend income. I have got a live example of a person who is living on dividend income — this man received Rs.

For a second, imagine yourself as a cattle farmer. Apart from this, after 2 year, due to high demand of cow in the market, you sold it at double price. They buy stocks at low, retain dividends like the farmer earned from dairy products and then sell it at high like the farmer sold it after 2 years.

They like capital appreciation more than dividend profits. No doubt profits from dividends are much lower than capital appreciation but what if I say there is a high correlation between both of them. The company has paid only one dividend of 10 cents during his reign, in , and Buffett later joked he must have been in the bathroom when the decision was made.

And I bet — your every doubt related to dividends will get vanished by you reach the end, if not, leave a comment. A stock that pays an annual dividend of INR 5 and is trading at INR a share has a yield of 5 percent.

Formula is as follows:. However, some corporate actions like stock split can break the trend. It is the part of net profit which is distributed to shareholders.

In other words, the percentage of Earning Per Share EPS which is paid to shareholders as dividends. In a while, we will further discuss this ratio in detail.

Dividend: ET Top dividend payers of

Each ratio has its own importance and sooner or later are used at different phases. That is why I keep a very low amount of money in my bank account. Always keep your money work for you. Non-performing money is all eaten up by inflation. The government is forecasting an inflation rate of 4. There are many stocks which are consistently paying more dividends than returns on a saving bank account. The dividend is also a good indicator of cash presence in the company.

Net profit is used in 2 ways:. These all eventually add values to shareholders. This is a kind of flaw associated with dividends. After the announcement of dividends, the stock price is compensated on ex-dividend date with the exact amount of dividends announced per share.

For example, This year Hindustan Zinc paid the highest amount of dividend of 24 per share. At that time, the stock price was reflected 24 points low on exchanges due to ex-dividend date. Sometimes the company with high payout lacks of growth in the company. Let me name few of them — PFC and REC. They both are a good company with high dividend yield. Return from capital appreciation will be quite low.

Each and every source has its own importance. It is a great hub of information related to stock market. Moneycontrol has a feature where they segregate the best high dividend paying stocks. It somewhat looks like this:. The advantage of screener over moneycontrol is that you can also add criteria other than dividend ratios to filter stocks. Only relying on dividend ratios is not the way to get good fundamental stocks.

S&P Dividend Aristocrats

You can also add other queries as per your personal choice. This guarantees that the stock is high dividend paying as well as it has good fundamentals. So screener goes an extra mile. How to analyze stocks in not more than 2 hours. Above 2 sources are one-time use only. There is no need to claim dividends. The money will automatically get deposited in the registered bank account with your broker.

No need to do anything. However, company will notify you for the same through email, like I receive an email illustrated below from ICICI for dividend distribution:. I prefer moneycontrol app.

Is there any minimum number of stocks or time frame to possess the shares to become eligible for the dividends? But do mind that you hold the stock on ex-dividend date.

When does a person is entitled to receive dividends? To be entitled to receive dividends you should hold the shares on the ex-dividend date. You will get the dividends on the amount of shares you hold. There is no rule for how many times dividend should be paid. However, many companies follow 2 times dividend policy: Interim and final dividends. There is no tax in hands of the shareholders. More information can be found here: How much do I have to invest to earn a decent income?

Another thing I want to understand is that dividends are paid out times in a year whereas your savings bank credits you monthly provided you kept your balance intact.

So how is stock investing any different from keeping my money in savings bank? Am I missing something or doing it wrong? I will just put my all money only in saving account.

Just would like to know how it happened. So you mean the company paid dividend to the share holders not from its profits.? Stock exchange automatically reduces the price of securities in spot market which is equal to dividends per share. And sometime company also pays dividends from its past reserves which is higher than its current profit like Oracle finance.

Very well written and easy to understand article. Continue with the good work and keep updating us regularly. In the last part you mentioned about tax. Got a question, I am a newbie in stocks and I have been working in corporate companies for sometime, so I pay tax every year but I have no idea about how to include stocks in it or how to declare a loss of stock in tax.

I have noticed a section where you have to mention about the stocks. I have no clue about. It would be great if you could show some pointers. In stock market, capital appreciation profit tax are deducted at source TDS , no need to again pay it.

Therefore looking for a CA to write an article on tax implication in stock market.

If you find one, let me know. Please note that you should declare yourself first as a trader or investor. If you do intraday then you are a trader otherwise investor. Trading income is speculative. Investment income is Non-speculative.

Ex-dividend date is the record date to determine the real owner of the stock to whom the dividends should be paid. I was wrong in assuming that banks pay interest every month. But banks pay do pay quarterly:. On ex dividend date, shares should be in my dmat account, right? Just follow this simple rule — you need to buy the stock before it turns ex-dividend to be entitled to get dividends. The case you mentioned about hindustan zinc is always the same with other companies also or is it just sometimes for some companies?

They outperform the market in long run. You get capital appreciation due to growth. You get growing dividend stream also only and only when the company is growing and making more and more money.

In fact, some live on dividends. They bought high quality shares and held them thru decades. Those companies grew manifolds in that period.

In short, look for growing and efficient companies run by high quality management. Rest all will follow — be it extraordinary capital appreciation, or be it extraordinary inflow of dividends a few years down the line. The only objective of being in stock markets should be to invest in companies that will keep growing well for quite some period. Rest all is noise. Those who invest in such companies emerge as winners on both fronts — they have stocks that are valued many times of the original purchase price, and they also get dividends which are huge compared to the original investment.

A cash rich company may pay dividends in absence of good earnings at times. However, soon those reserves will be gone. And with that dividend payouts too will stop or reduce. It is said that real investing is for dividends only.

10 crazy dividend paying stocks in Indian stock market (with pros, cons and some FAQs) – Sowmay Jain

However, great dividends come only after a few years or decades of great growth. Dividends are the outcome. Price appreciation too is the outcome. Growth is the driver. So how to find companies that will grow well for an extended period? Well, the whole market is trying to find that only. I really appreciate your efforts. I think dividend paying stocks should be chosen if we are looking to hold them for long term. I am retiring shortly. Am imterested to know in which shares i should park my money to get max regular dividend income with fair safety of my corpus.

I can invest up to 25 l in stock. I am retired person and would like you to suggest few stocks offering growth and good returns. I partly disagree with your below statement in the article: In other words, it will be cumbersome to check moneycontrol or run a query on screener again and again, to see whether there is any new dividend paying stocks in the list.

I would like to add that one can create Alert for your customized screen at Screener. I am using above facility since last two months. I hope this information could be of some help for the readers. Anyway, thanks for pointing it out. Let me thank you for suggesting formula for Intrinsic value of a stock based on its EPS TTM. I could build up custom ratio at Screener.

Now i have customized columns with my customised ratio which are shown for each and every screen that i open. Recently BPCL declared INR I want to know. My email id is — rajibchandra gmail. Yes, whenever cash goes out of company that is dividend or something similar happens like buy-back , the actual prices are proportionately adjusted. The reason behind this is to avoid the volatility due to dividend distribution. The Best article I ever seen…… Keep it up and Thanks for a lot of knowledge about dividend Actually I want to know about dividend since 3 months but no one clarify me the same, but in your article everything is crystal clear.

The person who holds the shares at the time of record date set by the company is entitled to receive dividends.