What is dividend? | what is Ex dividend date | what is record date | dividend payout ratio

Highest dividend-paying companies? Is buying them profitable or not?

Dividend
Dividend

It is not always profitable to buy high dividend-paying stocks because if you understand the full structure of why the companies give dividend then you will get to know that the companies which give the highest dividend are not making progress or not have any ways to grow the company and in the long term these stocks will never give you higher returns because the companies which distribute their profits in the shareholders and cannot invest in their own company are not that good business models because the stock prices of any stock increase when the company makes growth in its quarters but these companies even if they make profits they don't keep it to themselves they give it to the shareholders.

So if you consider the long-term view, high dividend paying are not that profitable as compared to the other companies which invest their money in the company's growth.

The short-term aspect of these types of companies can be profitable, but expecting higher returns from these companies is not that much possible practically.

Low dividend paying companies 

You can consider buying low dividend giving companies, but you also check that the company is also investing in its growth or not. Because besides everything, growth of the company is important. 
And you have to keep in mind that choosing any stock on its dividend payouts will always hurt your pockets in the long run. 

What is dividend?

Dividend is an insignificant amount of bonus given to every shareholder per share of that company from the profits of the company. Dividend is given when the company is on loan (debt.) free status and the company has nothing to do with the profits.

What is dividend yield?

Dividend yield is the percentage of dividend paid as compared to its current value.
If the share price of a company is 100 Rs. and the company has paid a dividend of 10 Rs. then the dividend yield of that company is 10%.

What are Ex. Date and Record Date?

Ex. dividend date is the last date of buying any share for getting eligible for the dividend and Ex. date is one day before the record date. If you want the dividend of any share, then you have to buy the share before the Ex. date and also if you buy the share on the Ex. date then also you cannot get the benefits of dividend.

You can know the Ex. date on the site of NSE or the BSE and also the company giving the dividend publishes its dividend related letter on their site.
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Location: United States

Comments

  1. Unknown23 April 2020 at 21:45

    Nice information bro

    ReplyDelete
  2. Aadesh Tupsakhare25 April 2020 at 14:33

    Thankyou so much broo

    ReplyDelete
  3. Francis Smith17 April 2021 at 14:42

    Dividend investing is a reliable method of wealth accumulation that offers the inflation protection bonds don't. Dividend investors should seek out companies with long-term profitability. More info at Ex-Dividend Date

    ReplyDelete

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