Dividend

Dividend is a portion of company’s net profit that is paid out to shareholders. Dividends are usually issued as cash payments. Financially secure mature companies usually tend to payout dividends on a regular basis providing investors with a stable source of income

A simple dividend investing strategy involves investing in companies that have a consistent history of paying out dividends. You can buy the Dividend Aristocrats smallcase to execute this strategy

dividend-aristocrats

This smallcase consists of companies which have increased their dividend payout consecutively, for the last 10 years.

A slightly intuitive strategy involves seeking out companies that have a consistent history of dividend payout as well as high dividend yield. A high dividend yield / increasing dividend yield can be due to either higher dividend payout or falling price, with the former scenario preferable. A company whose dividend yield is consistently above industry average is a good investment bet

Tata Chemicals, which manufactures soda ash and sodium bicarbonate for diverse end user industries, has a consistent history of dividend payout over the last decade with the average yield during this period being 3.4%. This company is part of the Dividend Stars smallcase.

dividend-stars

The smallcase consists of companies who have maintained an average dividend yield of at least 3% over the previous 10 year period without any slash in dividend during that period