Want to invest in companies giving good dividend

Dear Tradeing friends

I want to invest in good divident paying stocks.

1.Is it good to invest for divident.
2.can you explain me how to look for good divident paying companies.
3.good divident paying indian companies

Dividend alone will not give price appreciation. You should be looking for dividend plus profit growth in companies you want to invest. Here dividend will give (hopefully) protection in deep price correction.So you will get increasing dividend and an increase in share price.

The main thing is to look for dividend Yield (Dividend per share/stock price). You can use a simple formula of buying good companies near the savings account rate (presently at 4). You should be checking the dividend paying history of the company.You can do that from the BSE company website. This should weed out those companies who appear on stock screeners with huge yields which are not sustainable in the future.Another important thing to look out is the dividend payout ratio (Amount company pays out as dividend from the total profit) I look for companies with a minimum of 20% payout.Not a significant number just a random number from my part). This dividend payout ratio should give some warning against possible inflated profit figures (again hopefully).

You can use the Edelweiss stock screener for screening stocks based on dividend yield

http://www.edelweiss.in/Tools/screener.aspx

ITC is a good bet for investing for dividend. But the yield considering a 5 RS dividend this year is just above 2%.

Coal India is also a decent bet for investing for dividend and growth. But since it is newly listed not much of yield history can be found. But in the present circumstance Government may try to take cash out of it via dividends. So we might be lucky.

The best use of dividends is to screen small cap companies. You can pick the good ones from the bad ones using dividend paying history.

Disclosure - I have holdings on both ITC and Coal India

moneycontrol gives the data about dividend paying and dividend yield of the companies

hawkins
vst ind
hcl info

lol

The best use of dividends is to screen small cap companies. You can pick the good ones from the bad ones using dividend paying history.

Are these the ones you are referring to as per moneycontrol ?

How can I see the dividend payment for each of them to select the best ?

How about Corporation Bank? With div 20.50 yield is approx 5%.