When it comes to investing in the stock market, people generally aim at earning through capital appreciation. They often forget that they can earn regular payments in the form of dividends too.
This type of investing is called dividend investing.
While companies are not under any obligation to pay dividend, many companies pay dividend regularly in order to reward their shareholders.
Their dividend paying track record is sometimes the sole reason people may invest in them.
Hence, adding dividend paying stocks to your portfolio is like having a secret weapon in your armoury. But how can you earn this regular income?
There are two ways to invest in dividend stocks:
There are many funds out there which invest in dividend companies. These mutual fund schemes are called dividend yield funds.
HDFC Dividend Yield Fund, Sundaram Dividend Yield Fund, UTI Dividend Yield Fund, among others are some of the dividend yield schemes.
Now, let us look at some points while investing individually in dividend stocks.
Selecting a dividend paying stock is easier said than done. But one probable way to select dividend stocks is by answering the following four questions:
Dividend yield is calculated to see how much percent of stock price is paid to shareholders. Dividend yield is arrived by dividing annual dividends per share with current market share price.
Dividend pay-out means the percentage of net income paid to the shareholders. Dividend pay-out is arrived by dividing total dividend paid with the net income of the come.
High dividend paying companies are typically mature businesses. They plough back less profits for growth. They often trade at discounted valuations vis-a-vis the valuations of the broader markets and are fast-growing companies within their sector.
The art of dividend investing is not easy, but good things never come easy.
Nov 10, 2024
These 5 dividend growth stocks can help you achieve financial freedom and build lifetime wealth.
Oct 18, 2024
With a new year just around the corner, check out these five high dividend-paying stocks known for their solid payouts.
Sep 7, 2024
Which are the top companies that could create generational wealth in India? Find out...
Aug 16, 2024
Looking for cash in in these volatile times? These five companies are offering stable and hefty returns.
Jul 16, 2024
Hefty dividend payments are around the corner. Watch out for these five stocks in August 2024.
Jun 18, 2024
Looking for high dividend-paying stocks? Here are five stocks paying big dividends in July 2024.
Jun 4, 2024
A few standout companies are already making promising moves by increasing their dividend guidance for 2025.
May 22, 2024
On the hunt for high dividend stocks? Don't miss these five in June 2024.
May 12, 2024
Dividend stocks are making sense now. Here are 5 which have also performed well on the bourses in 2024 so far.
May 2, 2024
The Navratna company has not added any new NPA in the last eight quarters, and it's aiming to be NPA free by the end of FY25.
Oct 29, 2024
On the hunt for dividend stocks? Don't miss these five in November 2024.
Oct 5, 2024
Your dividend stocks watchlist for 2025.
Sep 4, 2024
Taking the example of Vedanta, we look at how a portfolio of regular dividend payers can give you income that flows in regularly, without you lifting a finger.
Aug 5, 2024
While penny stocks may seem risky, there are some companies which maintain their dividend payout ratios and have strong financials to back them.
Jun 19, 2024
One of the best dividend stocks in the country could benefit from the lithium gold mine.
Jun 14, 2024
How do you go about building a great dividend portfolio? Read on...
May 27, 2024
Share price of the defence shipbuilder has rallied over 75% in the past 10 trading sessions!
May 16, 2024
Discover the top dividend stocks offering investors a blend of income and long-term growth.
May 10, 2024
Dividend stocks make sense now. Here are 5 with the biggest payout ratios over the past 2 decades.
Apr 27, 2024
Craving Extra Cash? Here are three stocks for your watchlist.