Top dividend paying stocks

Shawn | Feb 8, 2011 |

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Stock market is a tricky proposition. Investors, traders and even those who break in and out each day have found that speculation might not be any easier. While hedging the stock, going for a higher leverage and following the routine pattern like the bellwether indices can help at times, at other times the resistance, support and exit and entry points are difficult to be analyzed. So much is so uneven about the stock market.

Having said this, there still is a semblance of surefootedness if you are thorough with your research. For instance, if you are looking for top dividend paying stocks, you can stick to the large capped FMCG groups. These in the long run would offer you nice dividends for your stock. Its just an instance but we can develop on it.

When a company profits, it makes it a point to offer a fraction of their profit as a dividend to its many shareholders, this dividend payout ratio is different for each company but is invariably measured as the proportion between total dividends bestowed total profit earned. If this figure is more than then you have certainly invested in a very generous company. It is in this regard that we can dare to call the large capped FMCG companies as being generous payers.

There are schools of shareholder training that look for dividend yield as a truer method for finding out which company pays a better dividend. Also if a stock offers a reasonable interest cover and an ROE extending beyond 15 percent then it sure makes a cut for a nice dividend paying stock in one way or the other. Stocks that pay dividends ensure that they fetch customer retention for their companies. It is nothing but the old philosophy of give and take. Customers across the global stratum show greater faith in companies providing great dividends. This is the reason why the minutes of annual boardroom discussions are anticipated with bating breath.

It is better to align some other aspects to the dividend payout for greater customer retention. These can include a market cap in excess of 50 billion, an interest cover stretching beyond 3 percent and various qualitative factors to ensure that the company has startling prospects in near and semi-distant future. Measured over a complete canvas, the stakeholders prize their possession. Top dividend paying stocks seamlessly work towards ironing out each aspect pertaining to market capitalization.