Which Companies pay dividend (Dividend-paying companies)? What Factors should be considered by investor / shareholder before investment?

Dividend paying companies can be attractive to income investors. These businesses have a tradition of sharing their profits with shareholders, which can provide a reliable stream of income. In some cases, these firms may also be less risky than other types of investments.

There are a number of factors that investors should consider when looking at dividend paying companies. One important consideration is the payout ratio, which is the percentage of earnings that are paid out as dividends. A company with a high payout ratio may not be able to maintain its dividend payments if earnings decline.

Another factor to consider is the company's financial health. Dividends can be cut or eliminated if the company experiences financial distress. Investors should also research the firm's history of dividend payments to ensure that it has a track record of making consistent payouts.

Larger, established companies with predictable profits are often the best dividend payers and the following industry sectors maintain a regular record of dividend payments: 

FMCG

Oil and gas

Banks and financial

Healthcare and pharmaceuticals

Informational Technology

What are the Important Dividend Dates?

Announcement Date: An announcement date of dividends is the day a company announces how much money it plans to pay shareholders in dividends. The dividend payout is generally made on a set schedule, such as quarterly or annually. Shareholders receive the dividend payment according to their ownership stake in the company.

Record Date: When a company declares a dividend, it sets a record date and an ex-dividend date. The record date is the cutoff for when shareholders of record will receive the dividend payment. The ex-dividend date is two business days before the record date and is the day when new buyers of the stock no longer qualify for the dividend payment. 

For example, if a company declares a $0.50 per share dividend and sets a record date of August 1, the ex-dividend date would be July 29. If you buy shares of the company on July 30 or after, you will not receive the $0.50 per share dividend payment.

Payment Date: The company's board of directors sets the payment date, and it is typically announced with the declaration of the dividend.

The payment date is important for shareholders because it affects when they will receive their payout.  It can also affect how much they will receive, since some brokers will pay dividends on a pro-rated basis if they are not received by the record date.

Generally, dividends are paid within 30 to 60 days after the payment date is set.  This gives the company time to finalize its financial statements and distribute payments to shareholders.

Example of a dividend?

If a company's board of directors decides to issue an annual 10% dividend per share, and the company’s shares are worth $100, the dividend is 5. If the dividends are issued every quarter, each distribution is $1.25. 

How dividends work? And Some of the high yield dividend stocks.

When it comes to finding high yield dividend stocks, there are a few things you need to keep in mind. The first thing is to make sure the company is stable and has a long history of paying dividends. You also want to make sure the yield is sustainable and not too risky.

Some examples of high yield dividend stocks include: Vedanta Ltd Indian Oil Corporation Ltd NMDC Ltd REC Limited Power Grid Corporation of India Ltd Oil and Natural Gas Corporation Ltd Housing and Urban Development Corporation Ltd Sanofi India Ltd RITES Ltd

Below is the graphical representation of – Market Cap, 3Y Historical Dividend Growth and Dividend Yield

Why Stock Dividend are important?

Dividends signals that a company has stable cash flow and is generating profits.

They also provide investors with recurring revenue.

Dividend payouts may also help provide insight into a company’s intrinsic value.

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Disclaimer: This information has been collected through secondary research and is only for educational purposes, quantace team is not responsible for any error.