This blog is to identify some of the high quality stocks which have a history of paying consistent dividends.
What is dividend?
Dividend is a part of the company's Free Cash Flow which it decides to distribute among its shareholders. It is not mandatory, but can act as a passive source of income.
Best dividend stocks Sector wise
1. IT sector
- TCS
- Infosys
- HCL
- Wipro ( Dividend amount has been decreased now as a lot people have already become a millionaire by holding this share)
Other than these, OFSS, LTI and Persistent Systems are some more companies paying healthy dividend and have shown a good upward movement in the stock price as well. (WIN WIN situation)
2. FMCG sector
- Most favourite ITC
- Britannia
Almost all of the companies in FMCG sector believe in paying good amount of dividend, so you can even opt for companies like HUL, TCP and also explore Varun beverages, Jubilant FoodWorks.
3. Auto sector
- Bajaj Auto
- Hero Motocorp
These are the major sectors which pay off heavy dividend with good stock price CAGR returns.
4. Other dividend paying stocks
Other than these sectors, you may also consider stocks like CAMS, HDFC AMC and MCX which also pay a good dividend.
So, all the best for your journey to achieving financial independence.
Frequently Asked Questions (FAQs)
1. Should I invest in PSU stocks?
Majority of the PSU stocks provide lucrative dividends, but you are actually losing your money as there is no much capital appreciation. (Charts of most of these companies are flatish over a long term period). If you wish to invest in some government held organisations, IRCTC and IEX are some options you may consider.
2. How is dividend taxed?
The dividend is now taxable in the shareholder’s hands as per your tax slab. (Which makes dividend investing strategy not a very suitable one for someone who falls in 30% or higher tax slab)
3. What is CAGR?
CAGR or Compounded Annual Growth Rate represents the mean annual growth of an investment over a period of time. It is used as a criteria to determine the performance of a stock (or any investment).
Happy Investing!
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