best dividend stock to invest | TOP DIVIDEND PAYING STOCKS 2020
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What are Dividend and Dividend Yield | benefits of dividends | dividend कब मिलता है ?
https://www.youtube.com/watch?v=Dv1t_j2Zzo8&t=253s
Best dividend stocks to invest
Fd se acha return dividend se
best dividend paying stocks
GOOD DIVIDEND STOCKS…
Not all stocks that pays dividends are good. There are two criteria which makes a good dividend stock:
Consistent dividend payout.
Consistent growth in dividend paid.
HOW TO IDENTIFY THEM?
identify potential dividend stocks. Do the following:
Step #1: Open the profit and loss account of the company.
Step #2: Check if the EPS has grown in last 5 years.
Step #3: Also check if dividend per share has grown in last 5 years.
Step #4: Compare if EPS growth and dividend per share growth are similar.
If EPS and ‘dividend per share’ growth are similar, it is a good sign. Why? Because of the following reasons:
EPS growth means, company’s net profit is improving.
Dividend per share growth mean, company believes in dividend philosophy.
EPS growth similar to dividend growth means, as company profit will increase in future, its dividend payout will also improve.
DIVIDEND STOCKS VS FIXED DEPOSITS
Good dividend stocks offer two clear benefits to its investors:
Short term income: Though starting yield of dividend stocks can be low, but it improves with time. Moreover, good stocks can yield very stable dividend income in short term.
Long Term Gain: There are two types of gains in long term. First, dividend per share will improve hence its dividend yield will also go up. See TCS example shown above. Moreover, there will also price appreciation of these stocks with time.
Though fixed deposits can give fixed interest, but it will never grow with time.
LIMITATIONS OF DIVIDENd
If dividend paying stocks are so good, why everyone do not only buy them?being aware of these limitations will further enhance the benefits of dividend focused investing for the investors…
High Dividend Yield is not reliable: Dividend yield is not a sufficient indicator to identify good dividend paying stocks. Stocks paying high dividend one year, and nothing the following year, is also not good. It may happen that a stock which is yielding 8% dividend today, may yield only 0.5% in next FY.
Dividend is high but fundamentals are weak: Few years back Strides Pharma was yielding dividend close to 33% per annum. On Mar’14 it paid dividend of Rs.505 per share. On Mar’18 it paid dividend of only Rs.2 per share. Why it happened? Because EPS of this stock fell from Rs.593 (Mar’14) to Rs.99 (Mar’18).
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