Top stocks paying highest dividend

Who doesn’t like to be rewarded for the risk undertaken? Some companies reward their investors by paying them dividends. In this article, we would be listing top stocks that pay hefty dividends.

There are various ways in which you can earn from investing in a stock. The two most popular ways of earning from stocks are by way of capital appreciation and by way of dividends. Having said that, paying a dividend is not mandatory on the part of a company. Hence, it makes no sense to simply rely on dividends.

Usually, companies declare dividends when they are profitable enough having no capital expenditure in the pipeline. However, if the company is just holding those profits in cash, where it neither pays dividend nor carries out any capacity expansion activities, calls for a deeper look at its fundamentals.

While looking at the companies paying the highest dividend, it is prudent to look at dividend yield. Dividend yield is nothing but a measure that shows the percentage of company’s share price that it pays as dividends. It is simply calculated by dividing the dividend per share by its current share price. In order to understand the dividend yield trend of the market, we would be looking at the dividend yield of Nifty 500 for the last five years.