Stock Shastra

As the market continues its see-saw ride, the interest surrounding high dividend yielding stocks seem to be on the rise. Because it is at times like these that investors can still get decent returns, thanks to high dividend yield stocks.

Are you such an investor looking for regular dividend income? Are you interested in knowing all about dividends? Do you want to know what a dividend payout ratio is and how to calculate dividend yields?

This simple blog is an answer to all your basic questions about dividends.

During FY 2001, Hindustan Unilever limited (HUL) paid a whopping 58% of its profits as dividends whereas Infosys paid just 11%!! Going by the general myth that investing in high dividend paying companies gives better returns, we should have invested in HUL and earned high returns while giving Infosys a miss.

But what would our returns look like after 10 years? Would we have laughed all the way to the bank with our investment in HUL or did Infosys actually nudge ahead? And does this strategy of investing in high dividend paying company actually work?

Retained Earnings V/S Dividends????
Which one do you choose? A company that declares dividend or a company that retains the profit???
This is always a tricky question & there are always different views on this topic.
Let’s see what they are:
The general perception people have is that by not paying dividends or not increasing the dividend policy the company is doing no good for the investors. This may or may not be true.
The good side about retaining the money is that the company may be investing the money in a fruitful project which may give you better returns a little later. The company may have intentions of launching a new product/service or building a new plant or probably is going in for expansion.
And the bad side??
There a few cases when a company does not benefit from the retained earnings. When does that happen?

When the management piles up cash far beyond its present or [...]

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It has been exactly one month since I started investing in the stock market. Before that I spent a month becoming aware of the various forces involved. What can I say the day I joined work is where it all began.
So much of information to process! So many companies to look at! The very idea of generating money so easily and quickly was enough to get me addicted.
Of course a month down the line the enthusiasm has substantially reduced L for obvious reasons. Anybody who has been a part of this market will agree with me on this. There is so much to study so much to explore a lifetime is not sufficient for this mammoth task. The fact that I have a job to do alongside definitely does not help matters.
I have outlined the mistakes I have made in the first month itself as a reference so [...]