Dividend Paying Stocks | What is Dividend & Share Dividend

Dividends are payments from corporate earnings to company shareholders. Dividends are one way for you to receive a return from owned shares. You can think of them as a reward for investing your money in a company.

Companies that earn a profit may (after paying their creditors) choose to reinvest that profit into business, pay it to shareholders, repurchase shares or pay off their debts. When the payment is made to shareholders, it is known as a dividend. These payments are usually made in cash which is known as a cash dividend, but in some cases, they may choose to make these payouts in the form of stocks too which is known as a stock dividend.

The dividend yield is often an essential factor for investors when choosing which stocks to invest in. The dividend yield is calculated on the current share price.

Dividend Offers By Company In 2021 - 2022 With Offer Price

COMPANY RECORD DATE Dividend Per Share Interim/Final
TCS Dividend 16/01/2021 Rs. 07 per share Interim Q1

What is a dividend in the share market?

What is a Stock Dividend?

A stock dividend can be described as an increase in the number of shares of a company; the new shares are given to existing shareholders. These shares are paid on a pro-rata basis to the existing shareholders. These payments are generally made infractions and are paid per share.

How do Stock Dividends work?

A company may choose to pay stock dividends for multiple reasons; the first being they do not want to reduce the company’s cash balance or wish to reward the shareholders despite having insufficient cash reserves. Stock dividend payout may reduce the share price, which may prompt increased trading and improve liquidity. Lower share prices increase liquidity as there is a more significant likelihood of someone selling a share that is priced at Rs. 100 rather than selling one that may be priced at Rs 5000.

For investors who are looking at getting immediate cash flows, cash dividends may seem like a better option. On the other hand, stock dividends offer a choice to the investor. They may choose to remain invested in the company with larger shares in the hope that the company will perform better with the reinvested funds or they may decide to sell some new shares and generate cash flows for themselves.