Dividend Paying Stocks

#1
Hello Everyone,

I would like to put forward this question of Dividends. If investing for long term, I believe one should look for companies with good Dividend history.
I understand that in the current scenario co. may not give dividends for 2 years but long term investors should still look for it.

Views please....

Now, how do I go about looking at how much dividend has been paid by a company over the last few years. please provide the options where I can look for it.

Thanks
 

AW10

Well-Known Member
#4
I somehow disagree with the appraoch of buying stocks for dividend (but thats my personal view and there are people who will disagree with it). My logic is - if book value of company's share is 10 Rs. and assuming stock is trading at PE of 9 that is its market price is 90 Rs. So our investment is 90 Rs. to buy 1 stock.
Even if company gives 30% dividend.. then it is calculated on face value of 10rs which turns out to be 3 Rs per stock. So it might sound that we are getting 30% dividend but effectively we are getting return of Rs 3/90 = 3.3% on our investment of 90 Rs.

Am I in the market to get a return of 3%, certainly not. Hence I wouldn't buy stock for its dividend yield. Dog of sensex / Dog of Dow startegy works becuse these stocks are beaten down so much that they are lowest performing stock in Dow/ Sensex so either they will be replaced next year.. or chances are high that their price will go up because they are already at the bottom. Not solely because of dividend yield.

Happy Trading.
 
#5
But how is it that the laggards of the Sensex will be the ones paying the max dividends???

And is there a way by which I can see the best dividend paying stocks of Sensex or do I have to search and compile the list manually ???
 

AW10

Well-Known Member
#6
It is not that laggards are paying more dividend. It is just that their price has come down, so the dividend yield (i.e. ratio of dividend payout % to current market price) looks better then other stock that has higher price. For ex - 30% dividend on a stock A having CMP of 100 Rs and 30% dividend on another stock B with CMP of 250 Rs.. Certainly dividend yield on stock A will look attractive.

Check out BSE site. I guess, you might be able to get dividend yield of companies there.
NSE site has this info (need to goto Indices/ historical data section).

Happy Trading
 
#7
@ AW10,

If one is investing for the long term (say for a period of 10 years), wouldn't you say that while investing it would be better to look and invest in companies that are blue chips and also hand out dividends as the dividend which may be insignificant as of now may accumulate to a significant amount in the said period of 10 yrs ???

I mean isn't it an added bonus ?
 

AW10

Well-Known Member
#8
Though people look at dividend as added bonus and it is. But that shd not be only criteria to buy stock. It is good as additional return.

I do invest for long term..but have no plan to stuck with one company for 10 yrs. As long as company's chart is showing what I want to see.. Iwill be there.. else I am out.
There are time when even monthly, quarterly and yearly charts will also give Sell Signals.

In march/april, we had sell signal on most of our stocks on monthly charts that are still not giving buy signals on monthly chart (I use them for long term analysis). Stocks are down more then 50% during this period. So I wonder, why do people live with such a big drop but enjoy a lot on <5% return given by dividend ? IMO, it is typical case of pound foolish penny wise.

Happy Trading.
 

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