What is a Dividend?
Quite simply, when a company shares the profits made amongst its shareholders, it’s known as dividend. For public companies which see a profit, they can either be reinvested into the growth of the company or shared amongst its shareholders.
List of Top Highest Dividend Paying Stocks
| Name | Price | PAT | Dividend (5YA) | Div.Pay | DY.5A | DY.C |
| SJVN | 25.1 | 1,651.89 | 1,045 | 63.25% | 7.19% | 31.43% |
| TCS | 3,325.00 | 33,260.00 | 11,176 | 33.60% | 1.45% | 0.07% |
| NLC India | 49.5 | 1,413.85 | 882 | 62.36% | 10.69% | 27.29% |
| Coal India | 129.6 | 11,280.88 | 7,234 | 64.12% | 13.73% | 6.64% |
| RIL | 1,983.45 | 30,903.00 | 1,810 | 5.86% | 0.27% | 0.02% |
| NHPC | 24.25 | 3,007.17 | 2,092 | 69.56% | 6.69% | 23.96% |
| HDFC Bank | 1,423.50 | 27,296.27 | 1,781 | 6.53% | 0.34% | 0.01% |
| Indiabulls Hsg | 192.3 | 2,159.91 | 1,083 | 50.14% | 18.84% | 7.04% |
| ONGC | 104 | 13,444.54 | 6,683 | 49.71% | 6.27% | 4.58% |
| Power Finance Corp | 114.15 | 5,655.14 | 1,317 | 23.30% | 6.34% | 6.69% |
| Oil India | 120.3 | 2,584.06 | 1,063 | 41.14% | 13.89% | 7.15% |
| REC | 132.1 | 4,886.16 | 1,591 | 32.57% | 8.77% | 5.72% |
| ITC Ltd. | 213.25 | 15,136.05 | 5,287 | 34.93% | 2.79% | 2.20% |
| HDFC | 2,515.70 | 17,769.65 | 1,863 | 10.48% | 0.65% | 0.03% |
| Bank of Baroda | 74.15 | 12,355.15 | 55 | 0.45% | 1.08% | 0.00% |
| NTPC Ltd. | 102.9 | 10,112.81 | 2,673 | 26.44% | 3.52% | 2.93% |
| Power Grid | 209 | 10,811.18 | 1,949 | 18.03% | 1.95% | 2.06% |
| GAIL | 139.1 | 6,620.63 | 1,702 | 25.71% | 5.30% | 3.16% |
| Infosys | 1,441.00 | 15,543.00 | 6,397 | 41.15% | 1.98% | 0.09% |
| Wipro | 450.9 | 8,680.70 | 465 | 5.35% | 0.95% | 0.05% |
PAT: Profit After Tax (Rs.Cr) – Net Profit | Dividend (5YA): Average Lump Sum Dividend Paid in Last 5 Yrs (Rs. Crore) | Div.Pay: Dividend Payout (Paid as % of PAT) | D.Yield (5A): Dividend Yield (Average Last 5 Years) | D.Yield (CY): Dividend Yield (w.r.t. current price)
What’s the formula to Calculate Dividend?
Annual Dividend per Share (divided) by the share price = Dividend Yield
How a Dividend is paid out?
When the result of a company’s performance is announced; with it usually is the announcement of the Dividend. The dividend is worked out on a ‘Per-share’ basis and is paid out equally among all shareholders.
Date is selected on which dividend will be paid out and is known as payable date or record date, the dividend payout must be approved by the Board of Directors.
What are the steps involved?
- First, the company must see profits and have retained earnings
- To generate trust and long term value for its shareholders, the management decides to share the extra profits made
- The board then has meeting in which it approves the dividend payout
- Company then announces the dividend with the date and value per share
- The dividend is paid out to the shareholders
Are there any types of Dividend?
Yes, there are a few types of dividends a company can pay to its shareholders.
Types of dividends
There are various types of dividends a company can pay to its shareholders. We you bring a list of the types below and how are they offered to the shareholders.
Cash – Most common type of dividend i.e. paying cash to each shareholder. The payout is made via electronic payment usually or by cheque
Stock – This type is where new shares are issued to shareholders. The proportion of shares issued are as a ratio like 2:1 etc, so they are based on the shares owned.
Assets – A company can even pay dividend in terms of physical assets or investment securities, however, this is very rare.
Special – this is a dividend that’s paid apart from the regular intervals like quarterly, annual etc. This happens when the company has excess cash.
Miscellaneous – Sometimes companies pay dividends in the form of options or shares in a new company too among other options.
Buyback is when a company buys its own shares from the open market. This returns capital back to the shareholders and adding value. It also reduces the number of Shares outstanding of the company thereby boosting its EPS (Earning Per share) when (net earnings/shares outstanding) is reduced the EPS automatically increases. This is also a commonly used strategy but can’t be called Dividend.