The dividend is one of the best sources of passive income and many investors prefer it as it also provides a cushion over the capital fluctuation. However, it is also important to find dividend stocks that are of high quality so that the stream of dividends is maintained in the future as well.
For this - the “I Dream Dividends” screener of InvestingPro+ is quite a good tool. From this screener, the highest dividend stock that surfaced was Vedanta (NS:VDAN) Limited. It is a natural resource company with a market capitalization of INR 1,87,324 crore.
Image Source: InvestingPro+
A quick glance at ProTips indicates that Vedanta has impressive gross margins and analysts expect its net income to grow this year. On the dividend front, it highlights that the company has been paying dividends for the last 24 consecutive years which is no less than commendable. This is something that investors must not ignore - the dividend history which concludes the entire dividend policy of the management.
The highlight of this counter is its dividend yield which is a very high 9.59%, the highest among all large-caps.
Image Source: InvestingPro+
Now you might be interested in when to go long on this counter. For this, the dividend yield chart is the best tool. This chart gives a graphical representation of the dividend yield (falling/rising) just like a price chart. The yield takes both the share price and dividend per share (DPS) into consideration, making it quite helpful for decision-making.
Now when this chart starts to rise, that is where either the price is dropping or the DPS is increasing. In both cases, the yield will rise and it marks a good time to make an entry. In short, a yield chart can be analyzed in the same way as a price chart.
Read More: Here’s How You Can Beat the Market with “Automated Stock Selection”
X (formerly, Twitter) - Aayush Khanna
LinkedIn - Aayush Khanna