Dividend Paying Stocks: These stocks with high dividend yields beat FD returns

Dividend Paying Stocks: When a person buys stocks, they tap into the possibility of generating returns from two sources — capital appreciation, and dividends. While capital appreciation is the rise in the market price of an investment, a dividend is paid by a company to its shareholders as a reward for investing in the business. A dividend serves as a barometer of a company's health. Companies that pay dividends make the dividend an important part of their capital allocation strategy.

Investors often consider investing in dividend-paying companies to be more lucrative as they get a share of the company's profits every year in the form of dividends. For many, the dividend is a part of long-term wealth creation. Here is a list of companies that have dividend yields more than usual FD rates.

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(Data Source- IDBI Bank Report)

(Selection criteria – Market cap should be more than 800 Cr, Dividend yield should be more than 3%, the company should be profit making for past 3 years, Five-year average ROE should be more than 9, Special Dividend (one off) are not taken into consideration, while consistent Special Dividend are considered, Consistent dividend paying track record.)

Dividends also help in capital protection.  The primary benefit of investing in dividend-paying stocks is that well-established companies increase their payouts after regular intervals. This rising dividend payout gives confidence to the shareholders that the earnings are real.

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