People like capital appreciation more then dividend yield.
Dividend yields of stocks are low compared to potential price appreciation. But remember, price appreciations are never certain. Comparatively, certainty of dividend income is far higher then price growth.
Why champion investors love best dividend paying stocks more? What makes top dividend paying stocks so likeable by champion investors?
Dividend income is one of the best forms of passive income. People who believes in passive income also loves stocks that pay dividends. Passive income in form of dividend is like an assured income.
Whereas capital appreciation (potential high growth) is not as assured.
For passive income lovers, it is essential to track and buy the highest dividend paying stocks. Not all stocks that pays dividends are best.
Expert investors does not like high dividend paying stocks just for assured income. Potential of dividend income to grow year after year makes it even more likable.
In this article we will provide list of best dividend paying stocks for passive income lovers.
Dividend payment is a process by which companies share its net profit with its shareholders. When companies increases dividend payout, it is actually giving a hint that its profits are improving.
Companies which are able to grow its dividend-payout year after year are an indication of fundamentally strong company.
What about dividend paying stocks we have here :
* Introduction about dividend paying companies and why expert investors love accumulating them.
* What type of companies can afford to distribute high dividends consistently year after year.
* The benefits of investing in dividend paying stocks that makes is so popular with both short term and long term investors.
* How we can identify best dividend paying stocks from list of mediocre dividend paying companies.
* List of top dividend paying companies with its last five year average dividend yield & payout ratio.
These companies are more confident about its future cash flows. Hence they dare to distribute large amount of PAT as dividends.Dividend stocks offer 2 clear benefits to investors. First, they generate short term income. This income is both consistent and also grows. Secondly, they also provide capital appreciation when held for long term. High inflation rate in India, makes other risk-free investments less lucrative.
As dividends are tax free, it clearly enjoys advantage over other risk-free options. The fact that dividend stocks can also provide capital appreciation makes them so special.Dividend Paying Stocks are Stable
Dividend paying stocks are very stable. Historically, price of dividend paying stocks waver less than other stocks. They have lower beta. We may not feel this benefit when market is fair. But when stock market crashes, dividend stocks stands tall.
Dividend is a strong value indicator
Value investors considers high dividend yield as a strong value indicator. If a quality stock is yielding high dividend, it is considered as undervalued. Improving sales and profit figures are one of the strongest fundamental indicators of quality stocks. High profitability and low debt dependency is just like an icing on cake.
Companies which shares its profits consistently (dividends) are confident companies. This confidence comes with predictability of future earnings. Companies will never compromise its short term liquidity to please shareholders. So if a company is paying dividends it means that liquidity is in full control. Maintaining liquidity to pay its current liabilities is a top priority for any company. A company which is paying regular dividends must have sufficient liquidity to take care of its current liability.
Re-investment of Dividends is Key
Reinvesting dividend further increases the yield. People must invest systematically to accumulate dividend stocks. This way not only they accumulate fundamentally strong stocks but also increase dividend earning.
It is important to reinvest dividend that flows-in. This extra money buys more dividend stocks. This cycle continues. More stocks means more dividend, which again buys more stocks. It is said that Warren Buffett earns billion dollars alone in dividends. Let us set a personal target for ourselves. In next five years our dividend income shall be reach Rs 5,000/month. Let us start accumulating quality, dividend paying Indian stocks.
Best dividend paying stocks in India
Contant taken by- moneycontrol.com
|Dividend Yield % at these prices||Dividend|
|52 High||52 Low||Current|
|Oracle Fin Serv||3,392.85||13,300.00||14.96||21.45||19.60||view|
|R Systems Intl||55.70||395.00||4.42||7.21||7.09||view|
|Bank of India||87.30||50.00||2.66||6.38||5.73||view|
|Shrenuj and Co||3.75||10.00||0.31||8.51||5.33||view|
|Indo Thai Secu||25.95||10.00||3.38||6.51||3.85||view|
|Punjab & Sind||44.35||16.50||3.49||5.21||3.72||view|
|Tata Inv Corp||510.15||170.00||2.70||3.77||3.33||view|
|Munjal Auto Ind||78.10||125.00||2.20||4.05||3.20||view|
|Indo Rama Synth||31.45||10.00||1.99||4.43||3.18||view|
|Gandhi Spl Tube||236.80||150.00||2.57||3.77||3.17||view|
|Tide Water Oil||5,660.85||3,500.00||2.10||5.11||3.09||view|
|Sun TV Network||364.90||225.00||2.58||4.40||3.08||view|
Contant taken by- moneycontrol.com
|Note : The Dividend Yield is calculated considering the total dividend paid as per the latest available profit and loss account or the unaudited results. The company may or may not continue to pay dividend at the same rate in the future.|