How to pick up fundamentally strong stocks for regular dividends?
As an investor, I feel very happy to receive the consistent dividend from my existing shareholding and it gives you some positive impression on your company. Let’s discuss how to pick up fundamentally strong stocks for regular dividend.
If your following get-rich-easily & quickly scheme, dividend investing is the right choice for you!
Dividend investing is for long term investors and the quality of the company you want to buy shares is super important.
The dividend will be the cash machine for you to get rich without any work but investing in dividend stocks.
What is a Dividend?
The dividend is the payment made by a listed company to its investors/shareholders. Usually, these payouts are made in cash (we will be getting dividends to our bank account which is linked with your Demat account), but sometimes companies will also distribute share dividends, where all existing investors get few additional stock shares.
Stock dividends are also known as stock splits.
Only a few well financially balanced companies pay dividends consistently.
The dividend is the recurring income (passive income).
Consider the below factors while selecting any stocks in the equity market for the dividend.
- Stability of the company – Company should be having consistent revenues.
- Free Cash Flow – Company should have a continuous cash flow from its operations.
- Fundamental Growth – Company should be having good fundamentals.
- Dividend Yield – There should be a minimal increase in dividend
- Consistent profits.
- debt – Please leave excessive debt companies.
- Ex-dividend dates
- Healthy balance sheets.
- Don’t focus on too much dividend yield.
- Don’t fail to diversify
Hope this article helped you understand the things you need to know before investing in mutual funds/stocks. Though this is a try to educate you about some facets of mutual funds/stocks one thing you need to keep in mind that mutual fund/stocks investment is always subject to market risk and you need to read and understand the policy/offer documents prior to investing.
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I hope you are clear on how to pick up fundamentally strong stocks for regular dividend.
Have a happy investing!