How many types of dividends are there

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Saurabh Guptahttp://karekaise.in
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How many types of dividends are there In Stock market?


There are 5 types of dividends:

  • cash dividend
  • Stock dividend
  • Scrip dividend
  • Liquidating dividend
  • Property dividend

Most companies only give cash dividend, that’s why you do not need to know about everything else.

There are two types of cash dividends.

  • Interim dividend
  • Final dividend

What is the Interim dividend ?

This is the dividend that the company can give at any time in the middle of the year, even the company can distribute the interim dividend to the shareholder 3 to 4 times, so you can say that the dividend is distributed to the investors on a quarterly basis. It is called ‘Interim dividend’.

What is the final dividend?

This is the dividend that investors get at the end of the year, meaning the dividend you get every year on an annual basis is called ‘Final Dividend’.

Dividend dates


To take dividend, you have to keep in mind some dates like

Record date:

  • This is the date on which your name should appear as a shareholder in the document records of the company.
  • The dividend paying company publicly announces the record date.
  • Companies can pay dividend any number of times in a year, that is why every time companies announce a record date so that the public can know that if they want to take dividend, then when will they have to buy shares.
  • If your name is not in the company’s shareholder list on the day of the record date, then you will not be given a dividend.

Ex dividend date:

  • Ex dividend date is usually one day before the record date, meaning when a company announces the record date, then the Ex dividend date is set 1 day before that.
  • If you want dividend of a company, then you have to buy the shares of that company before the Ex dividend date.
  • If you do not have shares before the Ex dividend date, then you will not get the dividend.

How to Calculate Dividend


You can use the Dividend Yield formula to calculate the dividend. According to this, if you have 100 shares of XYZ company, its dividend yield is 5% and the current market price is Rs 200, then you will get a dividend of Rs 1000.

I did the above calculation according to the formula given below:

Dividend Formula

Dividend = Current share price × dividend yield × number of shares (which you own)

To calculate dividend with this formula, you have to know 3 things:

  • First, the current market price (CMP) of the company, which you can find out by searching on Google.
  • Second, the dividend yield which is written in small letters at the bottom of the chart of the stock.
  • Third, the number of shares you hold, which you can see by going to the portfolio of your broker’s app.

How to calculate dividend per share?

If you want to calculate the dividend per share, then remove the ‘number of share’ from the above formula, then you can easily calculate the dividend per share.

So far you have learned to calculate dividend, now you know further that

Advantages and Disadvantages of Dividends


Below I have told you about some advantages and disadvantages of dividend.

What are the benefits of dividend?

  1. If you do not buy and sell the shares of dividend paying companies, but keep them for a long time, then you not only benefit from the increase in the share price, but also get income from dividend every year.
  2. There are also some good dividend paying strong stocks in the stock market like; Britannia industries in which your money keeps on growing with time by investing in it and dividend income is also available in the side.

What are the dividend losses?

  1. Traders do not get the benefit of dividend because they buy shares in the morning and sell them in the evening while stocks have to be held for dividend, so if you do trading then you will not get dividend.
  2. Some people do this that when the company announces the dividend, they buy the share and when they get the dividend, they sell the share.
  3. But if you really want to become rich from the stock market, then you have to hold the stock of a good company for a long time, this will increase the price of the stock and you will also get dividends from which you will continue to earn a regular income.

Do not invest in debt companies for the greed of dividend


  • You should check that why the company is able to give dividend means whether the company has really made profit or not.
  • If the company has debt and still it is distributing dividend, then you should stay away from such company.
  • like; If you see the dividend yield of Indian Oil Corporation (IOC) company is 10% and the debt on this company is worth crores of rupees. Now since it is a government company, so far it is stable in the market, otherwise if there was a private company, it would have been ruined by now.
  • Not only IOC but all other government companies also pay dividend despite having a lot of debt and this is the reason why their share price never increases in the long term.

WHAT DID YOU LEARN TODAY


I hope you have liked my article on How many types of dividends are there In Stock marketIt has always been my endeavor to provide complete information about the future of stock market to the readers, so that they do not have to search any other sites or internet in the context of that article.

This will also save their time and they will also get all the information in one place. If you have any doubts about this article or you want that there should be some improvement in it, then you can write comments below for this. this is only for educational purpose.

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