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What Is Dividend And Dividend Yield In Stocks: Companies Paying Dividend In 2022 To Investors

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Dividend and dividend yields are two important terms for the investors who are participating in the stock markets and trading shares.

 

What Is Dividend And Dividend Yield?

What Is Dividend And Dividend Yield?

The dividend is simply a part of the profit, that is offered by a company to its shareholders, mostly annually. The dividend yield is the amount of dividend paid by a company relative to its stock price, each year. The dividend yield is accounted in percentage, which is calculated as the dividend amount, divided by the company's current stock price, or current market price (CMP).

Some of the well-established companies generally pay dividends, while it is not a mandatory job for the companies. Not all of the reputed companies pay it the same way. Usually the small-cap companies or developing companies do not pay a dividend to their shareholders. It is easier for large-cap companies to pay a dividend. Small-cap companies tend to utilize their whole profit for more growth and expansion. However, paying a dividend to its shareholders projects a company to be strong in the equity market, and builds better confidence of the investors. Hence, even the smaller companies can also pay a dividend to establish their name better. Dividend yield fund managers would prefer to invest around 70% of their assets in high dividend-paying companies. The rest of their assets generally go to the companies with high growth records to hold a good portfolio.

Why pay a dividend?
 

Why pay a dividend?

Now the key question is why would a company pay a dividend to its shareholders? It is simply because this can attract more new investors to the company and it will help them to hold onto their existing shareholders. Paying dividends means the company's financials are proving to be very good in the fiscal. So, the company is being able to pay a part of its profit to the shareholders. Hence, it proves that the company is having a stronghold in the markets and has the potential to grow further. The stock price of the company can rise with the same growth rate. With the rise in stock price, the dividend yield will fall, and with a drop in stock price, the dividend yield will gain.

Ordinary dividends and qualified dividends

There are two kinds of dividends, like ordinary dividends and qualified dividends. The ordinary dividends will be taxed as your regular income. On the other hand, the qualified dividends will be taxed as per the capital gain methods.

Record date and ex-date for dividend

Record date and ex-date for dividend

Record date and ex-dividend date are two important factors for investors to hold the stocks. The record date is simply the date when the investor should be on the company's books as a shareholder, that the dividend can be paid. The ex-dividend will be generally 1 business day before the declared record date. The investors should hold a position in the company's stocks before the mentioned ex-dividend date in order to get the dividend. If you buy the stocks on the ex-dividend date or after, you will not be entitled to receive the dividend, rather, the seller will get the same. That means, on the ex-dividend date, the company's dividend-paying time will expire. Hence, after the announcement of dividend payment, this influences investors to hold the dividend-paying companies' stocks, before the ex-date.

Dividend-paying stocks/companies

Dividend-paying stocks/companies

Companies announce the payment of dividends, after having a board meeting regarding the same. Multiple companies have announced their dividend-paying details for 2022. Here, names of a few companies have been mentioned those will pay a dividend per stock, in 2022.

L&T Technology has announced interim dividend-paying details with an ex-date of January 25, 2022.

HCL Tech has announced interim dividend-paying details with an ex-date of January 20, 2022.

Siemens has announced final dividend-paying details with an ex-date of January 20, 2022.

Info Edge has announced interim dividend-paying details with an ex-date of January 17, 2022.

Sarthak Metals has announced interim dividend-paying details with an ex-date of January 12, 2022.

Railtel has announced interim dividend-paying details with an ex-date of January 20, 2022.

These companies are yet to announce their dividend amount.

(Also read: ICICI Direct Initiated Buy Call For This Diagnostic Stock, With Rs. 700 Target Price)

Story first published: Friday, January 7, 2022, 11:24 [IST]
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