Many of us have invested a good amount of money in the stock market. This is because investing in stock can give you positive returns in minimum time if done properly. However, there are other ways to make money from stocks and that is through dividends.
If a company generates profits quarterly, it can distribute a reward to its shareholders in the form of dividends. The company provides earnings in proportion of the number of shares you possess. The earnings are either shares or cash or cash equivalents.
For instance, let us suppose that a company gives a dividend of Rs 20 per share to its shareholders. If a shareholder holds 1000 shares of that company, he would receive an amount of Rs 20000 as dividends.
Investing in dividends provides investors with two types of potential profits: regular income from dividend payments, secondly capital appreciation over time.
Dividend-paying stocks are apt for those investors who want constant income or those who try to build their wealth by reinvesting dividend payments.
Here are some of the best dividend yield stocks:
Bajaj Auto is a two-wheeler manufacturer that has proven records over the years. The company’s relentless focus on the Indian market makes it better than the other two-wheeler makers in India.
Dividend Yield%: 3.85%
Payout Ratio%: 66.63%
Earlier known as Gas Authority of India, GAIL is known as a natural gas transmission business with a market share of 70%. It serves the following verticals including Natural gas, LPG transmission, Liquid hydrogen, City gas distribution, and more.
Dividend Yield%: 6.56%
Payout Ratio%: 24.58%
Earlier known as Imperial Tobacco Company, ITC Ltd started its business as a cigarette manufacturing company with multiple brands such as Gold Flake, Flake, Classic under its banner and more. Later it has expanded its business into various sectors such as hospitality, education and stationery products, paperboards and packaging. After acquisition with Sunrise Foods Pvt Ltd, ITC expects to strengthen its position in spice segments.
Dividend Yield%: 5.19%
Payout Ratio%: 55.98%
Power Grid Corporation:
Power Grid Corporation is a Gurugram based company that lies mainly in power transmission. The company was set up in 1990 and is now considered as a maharatna company. According to the sources, Powergrid transmits 50% of the total power generated in India.
Dividend Yield%: 3.28%
Payout Ratio%: 43.43%
Tech Mahindra is one of the top IT firms in India. The company initially started as a joint venture with British Telecom, which ended in 2012. The company provides numerous services such as Data Analytics, Cybersecurity, Digital Supply chain, Business Process Services, and more.
Dividend Yield%: 2.19%
Payout Ratio%: 32.42%