“Dividend” is a centre of attraction in the stock market. Besides searching for a good company, looking for high dividend should be the objective of investors. The primary objective of any types of investment is to get a higher profit, then why don’t we count the dividend return. Today we are going to discuss the details regarding dividend and how to identify high dividend paying stocks in 2018?
What is meant by dividend-paying stocks?
As a distribution of profits, a dividend is a payment made by a corporation to its shareholders. After earnings profit, a portion of it is distributed among its shareholders. The distribution is made only by the board of directors. A dividend doesn’t issue only in cash form but also in stock or in other property. We will place a classification of dividends later but before that let’s have a quick look at dividend yield.
What is Dividend Yield?
The expected return of a stock in a form of dividend refers to a stock’s dividend yield. Sometimes, dividends yield act inversely to the share price. It measures cash dividends paid out to the shareholders relative to market price per share. As from Dividend yield, investors can guess the future expected return of a stock in dividends, the calculation is quite significant here.
Dividend Yield= Cash Dividend per share/ Market Price per share x 100
Types of Dividends
Distribution of dividends may be in cash form or in share, the descriptions are listed below:
Cash Dividends- When the payments are made in cash form, known as cash dividends.
Stock Dividends- When the payments are made in stocks or shares are distributed among shareholders, is termed as stock dividends or split dividend.
How to Identify High Dividend-paying Stocks
- By using well-known financial website, app.
- Dividend-focused specialty providers and paid services
- Monitoring the market quite often.
High Dividend Paying stocks in 2018
The above image is taken from a website, represents the top 10 dividend yield list of the current year. If you go through the stock price of these companies, you may notice some of them are standing at a low price level. It is advisable to analyze a company’s background history and previous trace record first, then apply for it. Petrol. Coal, Zinc, Electric these are some of the elements which will certainly grow in the future. Besides, if the companies are paying high dividends, investors should think about these. Coal India or Hindustan Petroleum are such candidates.
However, Dividends play quite a significant role in the stock investment. Hence, You have to monitor the market on a continuous basis to find proper dividend-paying stocks.