It means all the shareholders for this company will get a part of the company's profit, which is usually paid in cash( goes directly to shareholders bank account), companies generally do this to reward their investors and show financial strength.
But what are the criteria to get dividends, when to buy stocks to get dividends, and how to know about upcoming dividend dates, lets deep dive into these questions so that anyone will not miss any opportunity to earn dividends.
When to Buy Stocks to Qualify for dividends ?
Investors need to hold stocks the whole day on an Ex-dividend date to get qualify for dividends.
Companies take this Ex-dividend date as a reference to finalise the list of shareholders of the company and then release the dividends to their respective accounts.
What is the benefit of buying Stocks which is about to release dividends to their investors
When you hold a stock you will earn from the rise in stock’s price over a period of time, but dividends give you an opportunity to earn money from your investment without closing your position in the company, it’s like you owning a part of the business and getting paid from the profit which business generates.
Risk Involved in buying stocks with high dividends yield.
If one is buying Stocks just for dividends they may earn from dividends but the value of stock may fall which can be far more than what you made from dividends.
So analysing fundamentals and technicals of stock before buying it for dividends is must to avoid high risk involved otherwise.
Where can I find the list of latest dividends declared on NSE and BSE?
One can always go to the official website of NSE and BSE to check the upcoming list of stocks declaring dividends, else can continuously check each companies official website for the announcements.
But if you want to pass this complex and tiring process you can check our Events page which has list of all ex-dividends dates with a proper timeline and a structured table where one can stay updated list of stocks who will be declaring dividends and can analyse the stock there itself to avoid any risks
What happens to a stock on its ex-dividend date in India?
On the ex-dividend date of any stock, the stock behaves a little differently from what technical or fundamental analysis says, because it is a major event and depending upon the details of it the sentiment and stock’s price behave.
Conclusion
While high dividend yield stocks gives investors a great opportunity to earn without closing your position, but one has to be very diligent, if buying only for dividends as it comes with a lot of risk as ex-dividend date for any stock is a major event date and stock may be highly volatile, also if stock is bought only for dividends ignoring the technical and fundamental analysis may involve a high risk.
Click here for the upcoming dividend dates for NSE-listed stocks