Indian stock markets have always held fascination and promise for investors. Lured by the prospect of high returns, many enter these markets with high aspirations. However, a crucial factor that should be considered while investing in stocks is the company’s dividend-paying track record. Dividends, which are a portion of the company’s earnings distributed to shareholders, offer a steady income stream and can thus be a reliable source of profits. In this article, we explore some upcoming dividend paying stocks that might be worth keeping an eye on.
For newcomers to the world of stock trading, an understanding of basic terminology can go a long way. So, what is a share? A share is essentially a unit of ownership in a company. When you buy shares, you become a shareholder in the company, giving you a claim on a portion of its assets and earnings, this includes dividends. One worthwhile strategy for smart investors is looking for upcoming dividend paying stock. These are shares of companies that have a history of returning a portion of their profits to shareholders in the form of dividends and are expected to continue doing so in the foreseeable future.
Several factors determine the selection of these upcoming dividend-paying stocks. These include the company’s financial health, profitability, debt levels, dividend payout ratio, and overall growth prospects. A strong balance sheet, high-profit margins, low indebtedness, a reasonable payout ratio (that is, the proportion of earnings paid out as dividends), and a track record of consistent growth are some of the indicators of a potentially good dividend-paying stock.
Take, for instance, another term – dividend yield. It reveals the return on investment for a dividend stock. It is computed by dividing annual dividends per share by the stock’s market price per share and multiplying by 100 to get a percentage. For instance, if a company declares an annual dividend of INR 5 per share and the current share price is INR 100, the dividend yield is 5%.
Now, let’s delve into some potentially promising upcoming dividend-paying stocks. These companies have a proven track record of rewarding investors with dividends, which increases their appeal.
One such company is Coal India, the largest coal manufacturer globally. It has an attractive dividend yield of 7.9%, with the last dividend announced amounting to INR 5 per share. The company’s robust cash flow and the government’s backing make it a potentially sound dividend-paying stock. Plus, it has a quarter-on-quarter (QoQ) profit growth of 45%, an important figure when calculating future dividend payouts.
Next up is ITC Limited, a prominent player in the Indian FMCG sector. The company boasts a solid dividend yield of 5.23%, supported by earnings from a highly diversified business portfolio. With a QoQ profit growth of 13%, it too shines bright in the upcoming dividend-paying stock landscape.
Oil and Natural Gas Corporation (ONGC), the largest crude oil and natural gas company in India, is another interesting consideration. The company announced a dividend of INR 5 per share in the previous year, and with a strong dividend yield of 7.45%, it finds a place on the list of promising upcoming dividend-paying stocks.
However, as with any investment, it’s important to thoroughly understand the complexities of the stock market before investing. While dividends can provide a steady income stream, they are not guaranteed, and the company’s fortunes could dramatically sway, altering its ability to pay dividends. Therefore, we advise all investors to carefully assess all the pros and cons before investing in any upcoming dividend-paying stocks in the Indian stock market.
In conclusion, the key to successful dividend investing lies in spotting companies that are not just profitable but are also consistently sharing their profits with shareholders through dividends. Such upcoming dividend-paying stocks may be the right choice for investors eyeing a safe and steady return on their investments in the volatile landscape of the Indian stock market. After all, the promise of profits lies not just in the appreciation of the share price, but also in the steady stream of dividends that end up in their bank account.
Anjali is the owner of the https://indiacsr.in/ , https://businessnewsthisweek.com/ and https://www.digitalsmagazine.com/ website. Her creative ideas, passion, and enthusiasm can be seen in her articles. Keep in touch with her for more interesting and helpful articles…….
