Dividend is a portion of company’s net profit that is paid out to shareholders. Dividends are usually issued as cash payments. Financially secure mature companies usually tend to payout dividends on a regular basis providing investors with a stable source of income
A simple dividend investing strategy involves investing in companies that have a consistent history of paying out dividends. You can buy the Dividend Aristocrats smallcase to execute this strategy
This smallcase consists of companies which have increased their dividend payout consecutively, for the last 10 years.
A slightly intuitive strategy involves seeking out companies that have a consistent history of dividend payout as well as high dividend yield. A high dividend yield / increasing dividend yield can be due to either higher dividend payout or falling price, with the former scenario preferable. A company whose dividend yield is consistently above industry average is a good investment bet
Tata Chemicals, which manufactures soda ash and sodium bicarbonate for diverse end user industries, has a consistent history of dividend payout over the last decade with the average yield during this period being 3.4%. This company is part of the Dividend Stars smallcase.
The smallcase consists of companies who have maintained an average dividend yield of at least 3% over the previous 10 year period without any slash in dividend during that period