Dividend Stocks

Dividend stocks are great for investors who want regular passive income from their equity investment. These are well established businesses because of which they earn good profit and are able to give regular dividend payouts to its shareholders.

Passive source of income

Potential for growth

Stability

Diversification

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What are Dividend Stocks?

Dividend stocks are shares of companies that distribute a portion of their profits to shareholders on a regular basis, typically quarterly or annually. These payouts are a way for companies to reward investors for their ownership and can be seen as a sign of a company's financial health and stability.

Best Highest Dividend Paying Stocks to Invest

Dividend Stocks More Collections >

These stocks have a history of paying high dividends to its shareholders! These companies consistently distribute a significant portion of their earnings to sha...Learn More

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Name	Div Yld	Price	M Cap	Analyst Rating	Target Price	Alpha	1Y Return	3Y Return	5Y Return	PE	Industry PE	PB	Beta	Net Profit Qtr	Net Profit QoQ %	Net Profit YoY %	Net Profit 3Y Change %	Rev Qtr (in Cr)	Rev QoQ (in %)	Rev 1Y change %	Rev 3Y change %	Profit Mar Qtr	Profit Mar QoQ	Profit Mar 1Y Change%	Profit Mar 3Y Change%	Sector	M Cap	ROE	ROCE	EPS	Volume
T.V. Today Network Ltd	38.68%	₹237.45	Small Cap	NA	NA	-1.93%	23.31%	-14.44%	-23.98%	28.07	136.27	1.3	0.82	29.12 Cr	314.81%	-51.39%	-36.68%	262.69	22.83%	-5.58%	2.45%	10.05%	237.71%	-48.51%	-38.2%	Consumer Cyclical	1425.18	8.87%	11.99%	14.79	195487
Vedanta Ltd	36.98%	₹398.50	Large Cap	HOLD	305	9.7%	37.96%	61.02%	124.54%	33.37	13.13	1.51	1.1	2868 Cr	-413.44%	-38.82%	-405.84%	34968	-9.28%	10.98%	74.44%	9.85%	-445.51%	-44.87%	-275.33%	Basic Materials	141644.14	32.48%	23.3%	38.99	10145781
Hindustan Zinc Ltd	25.73%	₹426.40	Large Cap	SELL	295.33	2.85%	31.39%	35.3%	52.15%	22.41	26.16	9.58	0.57	2038 Cr	0.49%	9.16%	0%	7285	3.08%	15.82%	0%	30.83%	-2.51%	-5.75%	0%	Basic Materials	173871.88	44.55%	48.52%	24.88	2418980
Bhansali Engineering Polymers Ltd	17.37%	₹102.05	Small Cap	NA	NA	23.94%	50.89%	-0.57%	110.37%	15.5	18.86	1.52	0.8	40.42 Cr	0.5%	-60.93%	104.09%	321.18	10.05%	-2.25%	23.38%	10.04%	-8.68%	-60.03%	65.41%	Energy	2519.69	13.28%	19.12%	5.49	585805
360 ONE WAM Ltd	16.02%	₹829.50	Mid Cap	BUY	804.11	74.65%	104.05%	202.13%	164.07%	37.31	30.85	6.52	0.63	192.11 Cr	3.33%	13.87%	227.05%	NA	0%	-0.62%	35.38%	31.95%	0%	14.59%	141.57%	Financial Services	30099.6	20.76%	17.04%	18.47	2685729
IDFC Ltd	15.29%	₹125.55	Small Cap	NA	NA	21.99%	47.68%	164.01%	198.92%	4.87	30.85	1.32	1.3	210.04 Cr	-6.04%	6499.18%	-526.04%	NA	0%	74.72%	-54.91%	2751.51%	0%	3677.07%	-1044.84%	Financial Services	19895.81	21.46%	21.72%	26.52	3124735
IL&FS Investment Managers Ltd	13.56%	₹10.10	Small Cap	NA	NA	36.92%	63.93%	94.17%	110.53%	41.67	30.85	1.64	1.1	2.24 Cr	28%	29.57%	-186.38%	NA	0%	33.3%	67.41%	22.64%	0%	-2.79%	-151.6%	Financial Services	314.03	22.47%	22.1%	0.54	186389
Gloster Ltd	12.57%	₹922.20	Small Cap	NA	NA	25.13%	48.76%	160.14%	89.77%	40.43	79.55	0.56	0.48	2.18 Cr	-67.41%	-16.68%	177.93%	136.95	-15.69%	-3.22%	43.5%	7.66%	-61.35%	-13.91%	93.68%	Consumer Cyclical	1012.42	5.65%	7.3%	49.7	0
Powergrid Infrastructure Investment Trust	12.23%	₹98.33	Small Cap	NA	NA	-46.69%	-19.75%	-4.85%	-4.85%	11.86	13.8	1.43	0.12	206.55 Cr	-34.54%	-196.35%	0%	319.25	0.34%	5.62%	0%	-34.72%	-34.76%	-191.22%	0%	Real Estate	8917.08	NA	NA	-4.91	439656
Chennai Petroleum Corporation Ltd	11.35%	₹1,084.75	Small Cap	BUY	925	288.1%	295.52%	936.3%	319.9%	5.84	46.53	0.56	0.88	365.28 Cr	-69.44%	161.2%	-271.73%	17375.91	5.02%	76.82%	106.09%	4.59%	-70.9%	47.72%	-183.33%	Energy	16025.84	64.62%	41.94%	237.16	4112410
Coal India Ltd	11.35%	₹455.25	Large Cap	BUY	457.78	69.48%	96.93%	256.4%	80.62%	9.49	13.13	7.88	1.29	9093.69 Cr	33.47%	61.84%	68.41%	33011.11	10.12%	26.01%	43.89%	20.34%	21.2%	28.43%	17.04%	Basic Materials	278832.64	89.54%	67.45%	45.64	10855921
Forbes & Company Ltd	11.12%	₹796.25	Small Cap	NA	NA	0%	19.49%	469.69%	307.62%	104.97	-48.72	3.65	0	10.83 Cr	-169.29%	-95.46%	-156.71%	72.13	3.1%	-14.13%	-83.81%	43.4%	-167.21%	-94.72%	-450.36%	Industrials	933.83	5.3%	8.08%	61.34	42966

Features of Dividend Yeild Paying Stocks

Regular income
Dividend stocks offer regular income to its shareholders. Dividend paying companies are a good investment option for the people who want a regular passive source of income along with good annual returns.
Stability
Companies that consistently pay dividends are often well-established and financially stable. These companies tend to have a history of generating steady profits and cash flows.
Inflation Hedge
Dividend paying stocks can also help an individual to hedge the risk of inflation. So therefore investing your money into dividend paying stocks can help you in saving your money from inflation.

Important ratios to consider before investing in Dividend Stocks

Invest in dividend stocks for reliable income, long-term wealth, and portfolio stability. Prioritize shareholder-friendly investments.

Dividend Yield
Formula: Dividend per share / Price per share
This ratio indicates the annual dividend income as a percentage of the stock's price. A higher dividend yield may suggest a better return on investment, but it's essential to ensure the yield is sustainable.
Payout Ratio:
Formula: Dividends per share / Earnings per share (EPS)

The payout ratio represents the percentage of earnings paid out as dividends. A lower payout ratio indicates that a company retains more earnings for growth or other purposes, while a higher ratio suggests that a significant portion of earnings is being returned to shareholders.
Return on Equity (ROE):
Formula: Net income/Shareholder’s equity
ROE measures a company’s profitability by comparing its net income to shareholder’s equity. A higher ROE indicates that, company can support sustainable dividend payments.

Benefits of dividend stocks in 2024

Investing in dividend stocks offers various benefits to its shareholders. Some of which are listed down below.

Indicates good cash flow
Companies with good dividend payouts indicate that the company is operating with good flow of cash in the system. It is often quoted that cash is the king in the business, and the companies that give out dividends proves that right.
Historical stability
The dividend paying companies have a strong history of operating the business efficiently which is why they are at a certain level where they can give out dividends out of the profits.
Long term wealth creation
Reinvesting dividends will significantly boost the total return over the long run

Points to consider before investing in Dividend Stocks

Before diving into dividend stocks, scrutinize key factors. Consider the company's financial health, dividend history, and earnings sustainability. Evaluate market conditions and payout ratios for informed investment decisions.

Dividend Yield
Assess the dividend yield, indicating the annual dividend as a percentage of the stock price, to gauge potential returns.
Dividend History
Examine the company's dividend-paying history, focusing on consistent and increasing payouts, signaling financial stability.
Earnings Sustainability
Evaluate the sustainability of the company's earnings to ensure it can maintain dividend payments over the long term.
Payout Ratio
Consider the payout ratio, comparing the dividends paid to the earnings; a lower ratio suggests greater sustainability.
Company Financial Health
Examine the overall financial health of the company, looking at key financial metrics such as debt levels, cash flow, and profitability.
Market Conditions
Be mindful of market conditions, as economic downturns or industry-specific challenges can impact a company's ability to sustain dividends.

Limitations of investing in Dividend Stocks

While dividend stocks offer stability, be aware of limitations. Market volatility, income sensitivity, and potential opportunity cost require careful consideration.

Market Volatility Impact
Dividend stocks may be affected by market volatility, impacting share prices and potentially diminishing overall returns.
Income Sensitivity
Economic downturns can affect a company's ability to maintain dividends, impacting the reliability of the expected income stream.
Opportunity Cost
Investors may miss out on potential growth opportunities, as dividend-paying companies might prioritize payouts over reinvesting in growth initiatives.

How to start investing in Dividend Stocks with INDmoney?

To buy Dividend Stocks from INDmoney, you will need to open a Demat account with them. Once you have opened a Demat account, you can follow these steps to buy Dividend Stocks:

Step 1
Download the INDmoney app and create your free investment account by completing your KYC ( Know Your Customer).
Step 2
Once your Free investment account is ready, you can either search for Dividend Stocks or go to the Stocks section and tap on Dividend collection.
Step 3
Choose a Dividend Stocks by looking at aspects like past returns, volatility, downside returns & proceed to buy.

Sectors Known for High Dividend Yields Stocks

Specific industries consistently deliver high dividend yields.

Utilities are a frontrunner among these. They have regulated operations and consistent demand. These ensure a stable revenue stream.
REITs capitalised property and rent also give shareholders big dividends. The dividends reflect the sector's strong cash flow. The consumer staples sector has an enduring demand for essential goods. It offers investors resilience and reliable dividends.
Beyond these, the energy sector is prone to market swings. But it can bring significant returns for shareholders. This is because its products and services are essential.
Healthcare, providing essential services and products, is another sector where investors might find attractive dividends. But, it has its own set of challenges and volatility.

Each sector has unique attributes. They let it provide high dividends. This highlights how crucial sectoral performance is in dividend investing.

What is the Dividend Payout Ratio?

When checking out those tempting, high-dividend yield stocks, diving deep into evaluating the dividend payout ratio is essential. Don't just get swayed by the impressive yield number; there's more to the story. A crucial thing to look at is the dividend payout ratio.

The dividend payout ratio shows what portion of a company's profit is paid to shareholders as dividends (expressed as a percentage). It's calculated by dividing dividends by net income. DPR = Dividends / Net Income. If it's over 100%, that's a warning sign. It could mean the company is paying dividends with borrowed money. This is not a sustainable strategy.

Remember, the dividends rely on the company's long-term success. This success comes from its growth, stable revenue, and the strength of its sector. By delving into these aspects, you can determine if those high yields are a sign of strength or a distress signal. Take a peek at the company's history with dividends, too – were they consistent or all over the place?

Should you invest in Dividend Stocks?

Investing in dividend stocks can be a strategic move, offering a reliable income stream and potential long-term growth. Consider these stocks if you value stability, consistent returns, and a shareholder-friendly approach. Assess your financial goals, risk tolerance, and the specific characteristics of dividend-paying companies before making investment decisions in line with your overall portfolio strategy.

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Frequently Asked Questions

Refer to the above

Dividend stocks are well suited for someone who is looking for regular income from a portfolio with decent capital appreciation.

You can invest in dividend stocks through brokerage accounts, mutual funds, exchange-traded funds (ETFs), or dividend-focused investment strategies. Researching companies with a history of dividend payments and strong financials is essential.

No, not all companies pay dividends. Some companies reinvest their profits back into the business for growth, while others may prioritize share buybacks or debt reduction over dividend payments.

Risks associated with dividend stocks include changes in dividend policies, economic downturns impacting company profits, and stock price fluctuations. Additionally, high dividend yields may sometimes indicate financial distress or unsustainable payout ratios.

Yes, dividend payments can influence stock prices, with positive dividends often attracting investors and contributing to share price stability.

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