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Which is highest paying dividend company in 2021? How does dividend get paid out?

Highest dividend paying companies for 2021

The recognition of the companies under this category is by the data available of past 5 years.

Indiabulls Housing Finance

Indiabulls Housing Finance had distributed a dividend yield of 15.8% with 9000 crores of market capitalisation, although the share price had generated a negative return for past year,

But the company’s past performance has shown that the company is good when it comes to dividend yielding as Company P/E = 7 while the industrial average P/E = 20, which marks the company as undervalued.

NLC India

The company is dealing with the power generation & mining with dividend yielding for the last year equals to 12.4% for about 7500 crores market capitalisation.

The company is worth investing for dividend because its P/E = 5 while the industrial average P/E = 10, which clearly shows that the company is still not valued correctly.

Oil India Limited (OIL)

As discussed earlier the companies which are government owned are the best in dividend distribution, so from the past performance of OIL it has a dividend yielding ratio of 9.92%, but the company losses in its EPS over the last year as it had generated a negative return of -50%.

Note: A dividend yield of around 10% is good enough to understand that the company is distributing the dividends heavily.

But keeping in mind rest figures like the company is trading in the stock market with 11000 crores of market capitalisation and also suffering a notable difference in P/E which is 4 and far away from the average which is 13.

Hindustan Zinc

Hindustan Zinc is the best dividend yielding company for large cap of 2020, Hindustan Zinc had given 15% return on dividend and also the company is trading with below industrial averages for P/E ratio which is 16, 19 for company and industry average respectively.

Coal India

Again the government own company which is the top 5 large cap company in dividend yielding with a total of 8.94% return through dividend.

The company worth 80,000 crores with trading at 6 which is below industrial P/E averages of 19.

The company had generated negative return on share price which is about -28%, but the company is distributing the dividend continuously throughout the years and years, so this company will also in the hit list for the best companies which can give the highest dividend in 2021.

Which is highest paying dividend company in 2021? How does dividend get paid out?
Best dividend paying stocks to buy in May, June: 2021

This article will address

The companies which declared dividend for the year 2021 are:

Companies

Dividend (in %)

Ex-date

HDFC Life

20.20

30.06.2021

Supreme Petro

125.00

25.06.2021

Bhansali Eng

100.00

22.06.2021

Supreme Ind

850.00

21.06.2021

Kansal Nerolac

200.00

17.06.2021

Tata Steel

250.00

17.06.2021

Tata Power

155.00

17.06.2021

Shriram Trans

60.00

16.06.2021

Tata Inv Corp

240.00

16.06.2021

HUL

1700.00

14.06.2021

Tata Chemicals

100.00

14.06.2021

Asian Paints

1450.00

10.06.2021

Nippon

50.00

10.06.2021

Tata Cons. Prod

405.00

10.062021

VTM

60.00

10.06.2021

Huhtamaki India

150.00

09.06.2021

Rallis India

300.00

09.06.2021

NELCO

12.00

07.06.2021

HDFC

1150.00

31.05.2021

Infosys

300.00

31.05.2021

Tata Coffee

150.00

28.05.2021

JM Financials

50.00

28.05.2021

Avantel

40.00

27.05.2021

Cigniti Tech

25.00

27.05.2021

Trident

36.00

25.05.2021

Welspun India

15.00

24.05.2021

Kennametal

200.00

24.05.2021

ABB Power Produ

100.00

19.05.2021


Also read: Zomato IPO: Should you invest, is it worth buying Zomato IPO?

Highest dividend yielding companies in India for 2020 are:

The company which gives the highest dividend in May, June: 2021 are:

Companies

Dividend yield

(per share dividend)

Oil India Limited

15.92

Indiabulls Housing Finance Limited

14.63

IOC

12.91

Hindustan petroleum

8.91

Hindustan Zinc

7.6

NHPC

6

Power Finance

5.85

NMDC

5.38

NTPC

3.97

Infosys

2.53

ITC

2.44

Tata Steel

1.84

HCL Technologies

1.78

Power Grid

1.64

TCS

1.26

According to the data given on moneycontrol for 2020,

Although there are 15 companies listed as the highest dividend yielding companies for 2020 but there is 1 company which everyone holds in his portfolio as it is somewhat called to be a blue-chip stock which has given consistent dividend yield for consecutive years. The company is ITC

Also read: 8 important types of corporate actions

What dividend means?

Most of the time, a good portfolio consists of the stock which are top dividend yield, high risk, consist return generation and a blue-chip stock.

Dividend earned from the stock’s selection can be viewed as the interest earned in fixed deposits and to make some amount of consistent money it is necessary to include that one type of stock.

How do dividend work?

Whenever the company makes extra profit with respect to its previous result, every company has 2 options:

  • Give dividend from extra profits made
  • To reinvest extra profits within the company

Dividend is the extra earning of the company which company distributes to its shareholders, to have trust in the shareholders and to maintain legacy in the market, most of the time they do it like this.

The company has no obligation of anybody in order to give dividends to its shareholders.

The company generates revenue throughout the year, then if the boards of directors and the promoters of the company find it needed to share the part of company’s revenue they make it clear in the Annual general meetings (AGM).

Also read: 5 Financial statements you must know.

How does dividend get paid out?

When dividend is given, it is important to consider 4 dates i.e., declaration date, ex-date, record date and payment date.

Declaration date is when the company declares that they are going to give the dividend to its shareholders, this date is around 30 days ahead of the ex-date.

Ex-date is the date on which share is listed on the stock exchange without the dividend. Generally, it is the date before record date if no holiday occurs.

Record date is the date when the shareholders need to get the shares in his/ her account to be eligible for the dividend by the company.

Payment date is when you received the payment for the share hold during the dividend time. It is generally a month from the record date.

There are two types of dividend which company declares, one is interim dividend, and the annual dividend.

The dividend which is given annually decided in the annual general meeting of the company is known as final or annual dividend.

The dividend which is given in between the year to gain the market attention is known as interim dividend.

There is one more type i.e., special dividend which is given for special occasions like when the company sign new deals and other profitable collaborations, etc.

Also read: Types of orders in stock market

What is Dividend per yield?

Dividend per yield is simply calculated by dividing the value of dividend given to the market price of 1 share.

Dividend per yield = Value of dividend given on 1 share/ Market price of 1 share.

The company which are generating more profits have the rights to high dividend yield but the company which are not generating good profits are not entered into the market of high dividend yield.

The company with the high dividend yields clearly shows that these are the company which are the high net cash reserves and cash and cash equivalents.

A good dividend yield is seen in the government owned stocks it is so because the government always share the profits with the shareholders and never let the bad policy overtake the company’s goodwill.

Most of the companies do not distribute the dividend like google their mindset towards the investment is completely different because they say they are not going to give you the dividend because the sources you choose for the investment for that money is not going to generate more return than the google alone will going to make in future.

Real estate investment trust is the type stock in which the dividend yield is exceptionally high, there in the stock market very few companies distribute high dividend in high dividend earnings.

Most of the time dividend yield is directly proportional to the share price of the share as most of time it occurs that when dividend yield increases unnecessary its effect can be shown on share price, it falls.

Also read: How to read auditor's report, detach main point.

Company worth v/s Dividend yield

There are companies in market which are not worth according to their dividend yielding, like they do so as to improve or retain their goodwill in the market. For these companies retaining their image in-front of the investors only option available because they are going with the bad fundamentals.

For these companies you have to stay away, you can check certain filters for their valued understanding these are:

Earning per share (EPS) v/s Dividend yielding

Everyone who is investing has the 3 choices while investing, investing in the company which has:

  • Good EPS, low Dividend yield
  • Low EPS, high Dividend yield
  • Average EPS, Average Dividend

Suppose you have invested in the company whose EPS is 10% and dividend yielding is also 10% then your total return from the stock is not 10% it is 20%.

An ideal portfolio is one which has out of many kind third category of EPS v/s Dividend yielding present in it.

For having this category in India, only the government run stock can fit into this filter as the government always share the profits with its shareholders and never let the bad policy overtake the company’s goodwill.

Incredible cash flow Dividend reinvestment back in business

The company is giving more than 20% dividend yield and stabling the image but on the other hand going on with the bad fundamentals, whose one feature is cash flow statements.

Cash flow statements are the view of total incoming cash and the total outgoing cash, which contain crucial information about:

  1. Cash Investment
  2. Cash in Financing
  3. Cash in operation

Check: the full article here

A improvement in cash flows through the years and years passes the company through this filter for giving the dividend according to worth,

Checking the company through the cash flows and understanding the truth behind giving high dividend is the qualities of wise investors and most of the novice investors don’t follow these basics and falls in the cage.

Dividend reinvestment back in business

There are companies which don’t give dividend rather they reinvest that profit back in business,

Most of the front-line noob investors are disappointed with these business tycoons but there are big players and their promoters who believes that they can generate more returns than their shareholders will going to invest their dividend earnings.

From first view your assumption is right but most of the large market capitalisation company applies this way in the business, like Alibaba, Boeing, Dell Technologies, Google, etc don’t give dividends.

This is just the one side of coin you have to think from the other side also.

Zomato IPO: Should you invest, is it worth buying Zomato IPO?

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Art of reading of 5 types of Financial statements.

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