- Dividends are a reliable source of return for investors when making investments in the stock market.
- The payment of a dividend is dependent on profits made by a company in a stipulated tenure.
- ASX-listed resource stocks are the best choices for investors when it comes to dividend payouts.
Many companies listed on the ASX elect to pay multiple dividends in a year. An interim dividend is paid by companies during the half-year, whereas a final dividend is renumerated at the end of the financial year. The dividend yield is the ratio of cash dividends paid to shareholders to the market value of each share. A good dividend yield is higher than the current interest rate.
Dividends are the important aspect of investing in the stock market. Dividends are the form of a reliable source of return. Over the past two decades, ASX has delivered a return of around 9% to 10%. However, the payment of a dividend is dependent on the profits made by a company in a particular tenure and if the company is offering a dividend yield of 4% to 6% coupled with growth potential is an attractive deal.