Stock markets are volatile and investors often look at dividend stocks to tide over turbulent market period. Dividend stocks provide two sources of return: regular income from dividend payments and capital appreciation of the stock price.
A dividend is a payment made by a company to its shareholders. When a company earns a profit, it may choose to distribute a portion of the earnings as a dividend to its shareholders. Dividends are typically paid out in cash, but they can also be paid out in the form of additional shares of stock or other assets.
Dividend yield is a way to evaluate the return an investor can receive from a stock investment in relation to its current market price. It is represented as a percentage and is calculated by dividing the annual dividend payment by the current market price of the stock.
Dividend yield of a stock is calculated by dividing the annual dividend per share by the current market price per share and expressing the result as a percentage. Dividend Yield = (Annual Dividend Paid / Purchased Price ) * 100.
Buying dividend stocks can be a great approach for investors looking to generate income. This strategy can also be appealing to investors looking for lower risk. Dividend yield helps to determine the expected income an investor can receive from a stock investment.
Suppose you have 10,000 shares of a company and you have invested Rs 2 lakh (Rs 20 per share) in them. The annual return of these shares is 15% and the company has declared a dividend of Rs 70 per share. In this case, your return on investment (ROI) will be Rs 3 lakh and the total return including dividend income will be Rs 10 lakh.
These are the high dividend stocks of 2023, according to Religare Broking
-TCS: Ever since 2005, the company has paid dividends at the end of every single quarter.
-HCL Technologies: Since FY14, the company has paid dividends consistently during all quarters.
-Nestle India: It paid dividends consecutively for all quarters from FY17 to FY20. For FY23, it paid a dividend of Rs 220.
The content in the story is for information purposes only. Investors or market participants should consult their financial advisors before taking any position