How to find Stocks that Pay Dividends?

Dividend payment is the process of sharing a company’s net profit with the shareholders. There are two approaches taken by equity investors - capital focused approach and dividend focused approach. Capital appreciation of stocks can generate good returns for the investors but carry inherent risks. Investors who are interested in a regular and reliable income stream adopt the dividend focused approach. Dividend payment is more predictable and can reduce the risk for investors.

The success of the dividend focused approach lies in choosing good dividend paying stocks and staying invested in them for a long term. When you choose the stocks that pay dividend, there are two factors that need to be considered:

• Consistency of dividend payout
• Consistent growth of dividend payout

You need to do your own research while picking stocks that pay dividends. It is recommended that you go through the past records of EPS (Earnings per share) and the dividend per share of the company. If the EPS growth and the growth in dividend per share are similar, it may be indicative of future profits and enhanced dividend payouts.

There are several sources that you can utilize to access information regarding companies and their performances:

1.Financial News Sites and Apps

There are financial sites that offer free access to data, tools and analysis for investors. Check out the company profile, stock chart, dividend yield and other fundamentals before you choose the stocks.

2.Brokerage Accounts

Individual stock brokerage accounts provide valuable information regarding stocks, pricing, dividend payouts and so on to their customers. Personalized reports and analysis are also available to online brokerage account holders.

3.SEBI website

The website of the Securities and Exchange Board of India (SEBI) offers a wealth of information related to listed companies, their dividend payouts, financials and so on.

4.Stock Exchanges

The NSE and BSE provide dividend data to investors to help them make informed decisions. Such data is available on their websites. You can analyze the historical data provided by these exchanges before you choose your stocks.

Dividend paying stocks offer the advantage of a regular income stream for the investor. The investor needs to choose the stocks with care, after going through the necessary information such as the consistency of dividend payout and the growth of dividend over the years. Such information is easily available on financial news sites and Apps. SEBI and the stock exchanges in India also provide valuable data related to listed companies. Make informed choices after doing your own research and analysis.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.