Dividend Yield Chart: Tells You ‘When to Buy' Dividend Stocks!

  • Stock Market Analysis
  • Editors Pick

There is a different level of love that investors shower on high dividend-paying stocks. While, growth and value investing still remain the most popular forms of investing, dividend investing also makes it to the list of investors’ favorite investing styles.

However, one confusion always persists in investors’ minds is when is the right time to buy dividend stocks. To select the right dividend stocks, investors generally look at their dividend-paying history in order to determine which are the right ones that should make it to the portfolio. However, when do you know is the right time to add them?

Investors generally check the dividend yield of the stock and when the yields shoot up, the stock becomes lucrative to add. The yield goes up when the company increases its dividend payout or/and the share price falls. But what if you could get a chart of the ‘dividend yield’ itself to determine the trend in the actual yield and not just the dividend payout? A dividend yield chart would tell you when the dividend yield is attractive to buy the stock and not just the dividend payout.

The difference between both is, that the dividend payout trend only tells you the actual dividend which could be deceptive as if the payout increases with the share price, the yields would almost remain the same, not making much difference.

This issue is taken care of by a dividend yield chart which tells you what is the current yield of the stock (not just the dividend) with respect to its past. Here is a tool that lets you see the charts of dividend yield to make better-informed decisions. Let us take an example of my favorite dividend stock, REC (NS: RECM ) Limited (It’s in my portfolio as well).

Dividend yield chart of REC for the last 9 years

Image Description: Dividend yield chart of REC for the last 9 years

Image Source: Investing Pro

From the chart above you can clearly see what has been the dividend payout history of REC in the last 10 years. It can be clearly seen that the trend in the payout has consistently been increasing. How can this be deceptive? If the stock price has also been increasing then a higher payout would probably not account for a higher yield. Now coming to a different perspective.

Dividend yield chart of REC for the last 10 years

Image Description: Dividend yield chart of REC for the last 10 years

Image Source: Investing Pro

This chart actually is the data set of dividend yield for the last 10 years. The benefit of it over the previous chart is that the dividend payout is also accounting for the share price fluctuation in REC shares. The line on the chart depicts the trend in the actual dividend yield of the stock. Looking at this chart, investors can literally see when is the right time to buy the shares of REC (the higher the line, the better the time), by having a combined view of the share price and dividend payout. For eg. looking at the chart above, the spike during March 2022 (Covid-19 period) was the best time to buy REC shares as the yields shot up to around a massive 30%.

The benefit of looking at this view is investors tend to see high-dividend opportunities from a combined view of payout and price. The chart also answers the question of what has been the historical average dividend yield, the higher and lower range, etc. Even if there has not been any dividend increase, a fall in the price would help uncover ‘hidden opportunities’.

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  • NIRAJ CHAUDHARI @NIRAJ CHAUDHARI
    could you write review for ADTB, JNSP, GMBR, CGPO, BLSN, SUMH
    Like 0
  • NIRAJ CHAUDHARI @NIRAJ CHAUDHARI
    could you write review for ADTB, JNSP, GMBR, CGPO, BLSN, SUMH
    Like 1
  • NIRAJ CHAUDHARI @NIRAJ CHAUDHARI
    could you write review for ADTB, JNSP, GMBR, CGPO, BLSN, SUMH
    Like 0
  • ASHOK KOTHARI @ASHOK KOTHARI
    good research
    Like 0
  • Vikky Donar @Vikky Donar
    Aayush bro I alws read ur all statements , u r really awsm on ur side , hats off bro , a grt thnx to you
    Like 3
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      Thanks. You made my day!
      Like 1
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  • Sanket Gadge @Sanket Gadge
    thanks!
    Like 0
  • Santosh Gavali @Santosh Gavali
    👍👍nice
    Like 0
  • Santosh Gavali @Santosh Gavali
    👍👍
    Like 0
  • Bipin Mehta @Bipin Mehta
    How I can see Dividend yield chart for each stock?please advice
    Like 0
    • Aayush Khanna/Investing.com @Aayush Khanna/Investing.com
      Hi Bipin, Investing Pro offers these charts for every stock.
      Like 1
    • Lucio Miranda @Lucio Miranda
      Who is “Investing Pro” ?
      Like 0
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  • Jayavel Dur @Jayavel Dur
    thank you
    Like 0
  • PRADEEP VERMA @PRADEEP VERMA
    Thanks for the valuable information
    Like 0
  • PRADEEP VERMA @PRADEEP VERMA
    Thanks for the valuable information
    Like 0
  • Devyash Patel @Devyash Patel
    nice one
    Like 0
  • Devyash Patel @Devyash Patel
    nice one
    Like 0
  • Devyash Patel @Devyash Patel
    nice one
    Like 1
  • Ravi Kumar @Ravi Kumar
    Thnks
    Like 1

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