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Top 5 High Dividend Paying Stocks in India - Should You Invest | Stock Market for Beginners | Groww - YouTube
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Dividends
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After hearing the name dividends, basically four questions would come in the mind of retail investors like you and I
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Firstly
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What are dividends?
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Second
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How do dividends work and how do investors get dividends?
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Third and most important
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Which company has given its shareholders a lot of dividend
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In the past year
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Fourth
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Should retail investors like you and I invest in dividend paying stocks or not
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I, Jagdeep Singh, welcome you to the Groww channel
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Let us start today's video
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But before that
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If you haven't yet subscribed to our channel
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Then please subscribe
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So that you can grow your money with Groww
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What are dividends?
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Now consider that I have a company, company A
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And this company earns a profit of Rs. 100 every year
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Now after earning the profit the company has two options about what to do with the profits
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First,
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The company can re-invest the profit in their business
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So that they can expand their business
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Secondly,
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If the company doesn't have the possibilities to expand much
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Then the company can share the profit among the shareholders
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The third option the company has that out of a Rs. 100 earnings
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Some money can be given to the shareholders
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And some money can be used for growth
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Now you must be thinking is it mandatory for a company to pay dividends
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No, friends, I will clear one thing here
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That no company has a compulsion that they have to pay a dividend
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It is upto the company if they have to give a dividend or not
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Now whenever we hear the term dividends, we get to hear four keywords
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And many investors like you and I get confused on hearing that name
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And the four common terms are
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First
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Announcement date
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Second
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Ex dividend date
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Third, record date
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Fourth, payment date
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Now you must be wondering what the meaning of the jargons I used is
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I will explain it to you one by one
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Firstly, announcement date
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Announcement date is that date when the company announces
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That they are going to give dividends to the shareholders
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And on the announcement date only the company
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Announces the other dates as well
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And after this comes ex dividend date
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Ex dividend date is that date
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Because of which, if you bought the stock even one day before
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Then you are eligible to take dividends
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Consider that the company's announcement date was 10th February
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But the company said that their ex dividend date is 15th of march
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The meaning of this is that
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That if you bought that stock on 14th of march
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Then you will get dividends
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But on 15th march or anytime after that if you buy the stock
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Then you won't get the dividend
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Now I will talk about record date
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What is record date?
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Record date is that date
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Where the company identifies which are the shareholders
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They have to pay dividends to
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And the record date normally comes the next day after the ex dividend date
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And it comes on the next date because
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Because if you buy a share a day before the ex dividend date
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Then your settlement will happen in T+2 days
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That will come on your record day
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So you will be eligible to take dividend
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And the final thing is payment date
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This is the day where the company pays out the dividend directly in the bank account of the shareholders
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Now I told you what a dividend is, how it works and how the company pays out its dividend
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Now you must be most interested to find out
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What are the companies that have given its shareholders the most dividends in the recent few years
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Now I will tell you the name of those five companies
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Who have given their shareholders a lot of dividends
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The first name that comes in this list is Vedanta
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Vedanta is a very big company whose business is spread out in many sectors
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If I talk about its market cap
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Then its market cap is of 53 thousand crores
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But now you must want to know that in the past year
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How much dividend has it given to its shareholders
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So vedanta has, in the past year
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Given a dividend of Rs. 18 to its shareholders
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If I talk about its dividend yield
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Then the dividend yield comes out to be 13%
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But now you must be wondering how Vedanta's share price has performed in the past year
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So, if I talk about Vedanta's share price, then Vedanta's share
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In the past year
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Has come down by around 26%
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So, if we talk about Vedanta's net return in the past year
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So from the price we get a loss of 26%
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We get a dividend yield of 13%
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The loss that Vedanta has given in the past year is -13%
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If I compare this to NIFTY's performance
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So NIFTY 50 in the past year
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Has given a return of almost 10%
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Now I will talk about the second company
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And the second company is BSE ltd
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Now after listening to this, you might get confused
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That BSE is an exchange
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So how did they pay dividend
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So, BSE ltd is also a stock,
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That trades at NSE
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And BSE's stock doesn't trade at BSE
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But it trades at NSE
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If I talk about the dividend that BSE has given in the past year
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Then in the past year BSE has given a dividend of Rs. 30
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If I talk about dividend yield
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Then the dividend yield is around 6%
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If we talk about a 1 year return
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How BSE has performed in price, so in terms of price in the past year,
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It has given a -18% return
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So if I see the price -18% return
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If I see the dividend yield which is 6%
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So the net loss that BSE has given its shareholders is of -12%
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The third company is Coal India
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The IPO of Coal India was India's biggest IPO
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And it's monopoly is in the coal business
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And it is a public sector company
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If I talk about dividend then in the past year, Coal India has given a Rs. 30 return
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And its dividend yield is around 6.8%
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If I talk about price
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Then its performance in price in the past year has been -20%
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The fourth company in this list is REC
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Rural Electrification Corporation
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This is a company that finances electrification in India
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And because of electrification there was a rise in demand in India in the recent times
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Because of which this company came in the limelight
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If I talk about dividends then in the past year, this company has given a dividend of Rs. 11
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Per share
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Then it's dividend yield is around 8%
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But in this company a very interesting thing comes into picture
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If I talk about price performance, then in the past year
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The price performance of this company has been +30%
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So if we talk about net return
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Then their price performance returns turns out to be +30%
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And the dividend yield turns out to be 8%
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So this company has, in the past year
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Given a net return of around 38%
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The fifth company in this list is IOCL, this is an oil marketing company
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Which is owned by the government
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If I talk about the dividend pay out in the past year
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Then this company in the past year has given a dividend pay out of more than Rs 9
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If I talk about its dividend yield
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So it is a little more than 7%
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Now you must be wondering how the price performance of this company has been
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In the past year
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If I talk about price performance
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Then the price performance of this company in the past year has been -7%
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So the net return of this company is -7%
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Plus 7.42%
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So this company has given an almost positive return in the past year
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Now let us come to the last question
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That should retail investors like you and I invest in dividend paying stocks
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And if we are investing then when and how should we invest
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So, I have always told you
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That every investor has a different risk
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According to them, there is a different investment
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Where they should make an investment
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So dividend is right for those people
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Who want a stable income
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Because the benefit of dividend is that your uncertainty becomes very low
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Because the company pays you dividend at regular intervals
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So as you continue to get dividend, then your source of income is continuous
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So for them, dividend paying stocks are very good
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Who don't want to take volatile stocks or price risks
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So, for what kind of investors aren't high dividend paying stocks good
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So those people should not invest in high dividend paying stocks
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Who want to invest in growth companies in the coming time
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If I talk about growth companies
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So those companies who keep a lot of growth capabilities in the coming time
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And the companies who keep growth capabilities in the coming time
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They don't pay their profit to shareholders directly
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But those companies re-invest their profit into their company
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And in the sectors where expansion is possible, they expand themselves in those sectors
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So, those companies that pay a high dividend
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Then it is also said in the industry, that those companies
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Don't have a lot of growth possibilities left
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Now in the mind of every investor this question comes that whenever he earns an income, how can he pay tax on that
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Like if in stocks I have capital gain
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Then on capital gains, I have to pay a certain amount of tax
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So, even on dividends, do we have to pay taxes?
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No, friends
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For investors, dividend is a tax free income
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Because the tax for that is paid at the company's level
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And whatever dividend you get in hand
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You get in your bank account,
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It is completely tax free
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So, friends, I will end this video with two thoughts for you
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First,
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If you want a fixed income and you don't want to take much risk
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Then maybe for you high dividend paying stocks are really good
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But if any investor wants to invest aggressively
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Who wants to invest in growth stocks
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Then maybe dividend paying stocks won't be that good for him
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I will end this video with two questions for you
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First question
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In what category are you most interested to invest in
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High dividend paying stocks, or growth stocks
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And in this category, which stock have you chosen
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You can comment down below and let us know
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So that our other viewers can benefit from that
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So, friends, Groww is bringing out a new series
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With the name #AskGroww
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Through which, if you comment a question on our videos
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From that we will choose any ten questions and make a video
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And answer those questions in great detail
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So if you have any question in mind
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Then you can go to the comment section of this video and ask us any questions
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If you liked this video, press that like button, share the video with your friends
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So that financial knowledge can reach them as well
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And if you haven't yet subscribed to this channel, then please subscribe
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And yes, in any video
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We absolutely do not give any recommendation of buying or selling
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We make every video purely for educational purposes
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Happy investing!
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