Share Investment High-Dividend,Companies in India
Not all companies sit on excess cash and spend it foolishly. Some generously share excess profits with their shareholders by paying out dividends.
Historically, high dividends correlate with high return ratios. The top six companies with the highest dividend payout ratio over the past three years (as a percentage of net profits paid to minority shareholders) also generated good return on equity (ROE).
A consistently high ROE indicates the management is putting investor money to good use.
These companies give investors a cushion in a volatile market. In a bear market, pessimism pulls down companies with strong fundamentals. But the dividend provides investors the incentive to hold on to the stock and ride the storm.
While returns from these stocks are more likely to be steady than exponential, the downside is limited.
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