Dividend Stocks
Introduction to Dividend Stocks
Dividend stocks are companies that have demonstrated a track record of delivering significant returns to investors by providing timely dividends. These stocks would have a high dividend yield, which is generally between 2% and 6% which means that any investor's holding will receive a steady income in terms of dividend based on the number of shares the investor owns.
Key Features of Dividend Stocks
Strong Earnings
Dividend stocks are companies with a proven track record of delivering strong revenue and profit growth and pass on the benefit through dividends to investors.
Proven Track Record
These stocks have a proven track record of paying out handsome dividends to its stakeholders
Stock Price Growth
Dividend stocks have a history of significant stock price growth, making them attractive for potential capital appreciation.
Investment Potential
Investing in Dividend stocks may offer an opportunity to maximize returns and achieve financial goals.
Details of top Dividend stocks
Some top Dividend stocks which have delivered significant returns in recent years are, Gail, Hindustan Zinc and Tata Steel among others.
The dividend yield - The ratio between the annual dividend of a company vis a vis its stock price is the dividend yield for that stock - shows investors how much additional income they are earning for holding a particular stock.
GAIL
Gail India is a gas distribution company and is known to provide consistent dividends to its shareholders. The company has a dividend yield of 6.48%, which is above industry averages.
Hindustan Zinc
Hindustan Zinc is a mining speciality company which undertakes zing and other mineral mining operations in India. It is also a company which is known to provide consistent dividends to its shareholders. The company has a dividend yield of Rs 5.83%.
Tata Steel
Tata Steel is a subsidiary of the Tata Group and is a steel manufacturing company. The company has a major influence in the agriculture, automobile, construction, consumer goods, energy and power sectors of India. The company has an average dividend yield of 4.84%.
How to analyze Dividend Stocks?
Company Financials
As most companies, it is imperative to understand how the firm has financially performed over the past few quarters to get a basic understanding of its business.
Dividend trend
Investors should also have a keen understanding of how many dividends and what is the timeline of the dividend payouts by any company.
Dividend yield
Only tracking dividends won’t be of much help, an investor must also understand what is the dividend yield - which essentially will show you what your dividend returns are for holding the stock for more than a year.
Who should invest in Dividend stocks?
Dividend stocks may be ideal for growth-oriented, long-term, and risk-tolerant investors seeking higher potential returns. It is also suitable for investors who want to invest a lump sum amount in a safe business which will generate consistent revenues for the shareholder.