Dividends

Dividends

Dividends

Whenever a company earn profit significantly they will give some proportion of it to its shareholders called as dividends. The board of directors decide the amount of money to be given as dividends to all shareholders . It’s a kind of reward given to its shareholder which also have voting rights when they buy shares in those companies . Dividends are issued at various time fixtures with distinct payouts . It can be paid monthly ,quarterly or even annually . However it is not necessary that company will only pay dividends when there is profit ,some of the corporation pays to maintain there track record of giving dividends to their shareholders .

For example recently Piramal Enterprise has issued dividends For the year ending March 2018, Piramal Enterprises has declared an equity dividend of 1250.00% amounting to Rs 25 per share. Mostly large established corporation offers dividends . The company has a good dividend track report and has consistently declared dividends for the last 5 years. Some of the Top Dividend Paying Stocks in India are listed below :

  • Vedanta Ltd.

  • Hindustan Petroleum Corporation Ltd (HPCL)

  • Indian Oil Corporation Ltd (IOC)

  • Power Finance Corporation Ltd (PFC)

  • Reliance Industries Ltd (RIL)

  • Coal India Ltd

  • National Aluminium Company Ltd (NACL)

  • Infosys Ltd

  • Hindustan Zinc Ltd

     

     Important dates associated with dividends :

  • Announcement date : On this day major announcement made by the company for paying dividends to their respective shareholders . Although before announcement it must be approved by shareholders .
  • Ex-dividend date : Ex-date or Ex-dividend date is same thing this is the date on which eligibility to get the dividends expires,  Let us suppose Infosys announced ex-date to be 26 April than if you buy or have shares on this date or after this date , will not be eligible for dividends . You have to have the share 1 business day prior or before that to be able to get qualified .
  • Record Date : Companies decide & determines which shareholders are qualified for receiving of dividends . It’s a kind of cut-off date .
  • Payment Date : This is the day when the shareholders will get the payment or money transacted to his account .

Dividends are paid usually by the company to win the trust of their shareholders and investors .It is a way to recognize and give some part of profit the organisation earns . So when you want to invest money for long term make sure the company does pay a high dividend as it becomes one of the passive earnings for your portfolio .However Growth is equally important if you are looking for better returns .

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