UrbanPro
true

Learn Stock Market Trading from the Best Tutors

  • Affordable fees
  • 1-1 or Group class
  • Flexible Timings
  • Verified Tutors

Search in

What are dividends?

Hanamant Kullur
03/04/2017 0 0

What are dividends?

Dividends are nice.

They are  payments made to shareholders out of the money a company makes. For example, if you have 100 shares in Glaxosmithkline and they pay a yearly dividend of £1.00, you would receive £100.00 a year from Glaxosmithkline in dividends (100 shares x £1.00 dividend).

Not all managements will agree to pay its shareholders dividends. apple for example only started paying their shareholders a dividend in 2012. Some companies never pay a dividend.

Dividends can also form part of an investment strategy if you would like to create an income from your investments.

Dividends: getting paid while someone else runs the company

Whether a company pays a dividend or not  is something you will need to assess and make part of your investing strategy before you purchase your first shares.

Here are a few suggestions:

  • What is your reason for investing? If you would like to receive income while you investthen you need stocks that pay a dividend. If you pursue a purer Value oriented then dividends are not so important. In some cases a lack of dividend may actually alert you to a value investing opportunity.
  • Check the numbers. A company’s ability to pay a dividend is dependant on its ability to continue making a profit. But because the future is unknown, check the dividend payment history of a company going back as far as records go. If you can’t be bothered with that, check at least 10 years’ worth of dividend payment history.
  • Review the company’s financial position. Dividends can only be paid when a company is in good financial shape and management are willing to pay a dividend. Use screener to check whether a company pays a dividend whilst taking account of the health of their finances.

Even though dividends can increase your wealth, shares should not be purchased just because the company pays a dividend.

0 Dislike
Follow 1

Please Enter a comment

Submit

Other Lessons for You

I'm 18 and have saved 60,000 INR (900USD). How should I invest?
It is good to know that you are thinking of investing options at a very early age. However, you have to remember that investing is a long term option, where in you need to invest continuously, systematically...

Should We Take Advice From Advisor?
This is an essential question one should ask himself/herself in the trading world. The stock market has become filthy nowadays because of a load of information and introduction of new technologies to spread...


How does global trade affect stock markets?
Global trade affects stock markets in several straightforward ways: Economic Growth and Company Profits: When countries trade with each other, they can grow their economies faster. This growth...

Is there a complete guide for stock market trading in India?
Yes, there are several resources available that can serve as comprehensive guides for stock market trading in India. Here are a few suggestions: 1. Books: There are numerous books written specifically...

Looking for Stock Market Trading Classes?

Learn from Best Tutors on UrbanPro.

Are you a Tutor or Training Institute?

Join UrbanPro Today to find students near you
X

Looking for Stock Market Trading Classes?

The best tutors for Stock Market Trading Classes are on UrbanPro

  • Select the best Tutor
  • Book & Attend a Free Demo
  • Pay and start Learning

Learn Stock Market Trading with the Best Tutors

The best Tutors for Stock Market Trading Classes are on UrbanPro

This website uses cookies

We use cookies to improve user experience. Choose what cookies you allow us to use. You can read more about our Cookie Policy in our Privacy Policy

Accept All
Decline All

UrbanPro.com is India's largest network of most trusted tutors and institutes. Over 55 lakh students rely on UrbanPro.com, to fulfill their learning requirements across 1,000+ categories. Using UrbanPro.com, parents, and students can compare multiple Tutors and Institutes and choose the one that best suits their requirements. More than 7.5 lakh verified Tutors and Institutes are helping millions of students every day and growing their tutoring business on UrbanPro.com. Whether you are looking for a tutor to learn mathematics, a German language trainer to brush up your German language skills or an institute to upgrade your IT skills, we have got the best selection of Tutors and Training Institutes for you. Read more