Table of Contents

Table of Contents

How to Earn 1 lakh per month through Dividend?

How to make ₹1 lac through Dividend Investing

Introduction

Usually, Indian investors find higher value in high dividend-yield companies. That is why more than 70% of companies from the BSE 500 pay a dividend every year. Unfortunately, many of these retail people have no idea about fundamentals of high dividend paying company. Therefore, many of such people lose their hard-earned money, fall in the dividend trap only because of lack of knowledge from share market training in Noida.

Dividends can be an excellent source of income, especially in this volatile market, when stock prices are not rising. But why not follow dividend investing, blindly? Dividend investing is a good way to earn secondary income along with enjoying the capital appreciation for your invested stocks. When invested correctly, investors can earn amazing income through dividends. In this blog, we will understand the pros and cons of investing in dividend investing just as it is taught in stock market courses online with certificate!

PSU and cyclical stocks are usually high dividend paying stocks. Most of the high dividend-paying are blue-chip PSU companies, where the government is the main promoter. Handsome dividends are offered consistently, helping government increase its revenue and lower fiscal deficit. If you are looking for stock market courses online with certificate or share market training in Noida, you can learn more about PSU companies and how they operate internally and behave more like an NGO. PSU companies are built to cater to the society and not to run profitable, therefore it pays back to its shareholders instead of focusing on profits and growth.

Investors who are looking for periodic dividend pay-out benefits should purchase cyclical stocks during the recovery phase of a business cycle. In such cycle, the sales level increases manifold during such time, the net profits realized rise as a result as well, allowing cyclical stock companies to announce dividend pay-outs frequently. Online share market courses teach you how to identify cyclical stocks and take advantage of their potential for high dividends.

You can see that if you take CAGR 5 year returns you can see that it is negative for most of the stock. Therefore, you need to understand the cycles to know when to invest and when to come out of it. If you have those kinds of expertise, then you can pick PSU and Cyclical stock when they are in a recovery face. To learn more about the best stock market courses for beginners free, you can do some research online and find online share market courses that suit your needs.

Name5Yrs return %Div Yld % 
REC Ltd-0.610.15
Natl. Aluminium-1.758.27
Coal India-3.227.66
GAIL (India)-5.176.99
Oil India-3.286.8
H U D C O-8.926.76
Power Grid Corpn7.55.5
NHPC Ltd3.964.54
Mahanagar Gas-5.092.97
R C F6.782.88

We say this because if you see data of past one year of cyclical and PSU stocks, you will be amazed. They have performed extremely well both in terms of capital appreciation and dividends. If you understand the cycles, then you can buy such stocks in your dividend portfolio.

Name1Yr return %Div Yld % 
REC Ltd14.5410.15
Natl. Aluminium-20.178.27
Coal India52.17.66
GAIL (India)8.656.99
Oil India13.326.8
H U D C O33.256.76
Power Grid Corpn5.455.5
NHPC Ltd29.364.54
Mahanagar Gas-1.662.97
R C F80.692.88

Cyclicals are like blackjack: “Stay in the game too long and it’s bound to take back all your profit.” Avoid planning to invest in cyclical stocks for long term. If you’re planning to stay too long thinking that these stocks are ‘forever’ like any secular growth stocks, then you are in for disastrous returns.

When it comes to stock market courses online with certificate, it’s important to understand that dividend investing is a good way to earn secondary income along with enjoying the capital appreciation for your invested stocks. Investors who are looking for periodic dividend pay-out benefits should purchase cyclical stocks during the recovery phase of a business cycle as the sales level increases manifold during such time, the net profits realized rise as a result as well, allowing cyclical stock companies to announce dividend pay-outs frequently. It should not be like you invested for dividends, but you lost more on your invested capital.

In terms of online share market courses, it is important to note that any dividend income from shares of an Indian company is taxable in India. In case of a shareholder qualifying as a ‘resident’ in India, dividends from domestic companies and mutual funds are taxable in the hands of the shareholders and unitholders at their applicable slab rates.

Comparison with FD:

You can see from the table that many high yielding dividend stocks generally give returns less than that of FD. Only 3 out of the 9 companies derive returns higher than that of FD. Also note that these power companies that is REC and NHPC showed a rise mainly because of the Russia Ukraine war. Therefore, when these companies do well that is generate higher profits, there will be capital appreciation and higher dividend payments.

NameAverage 5 years Div Yld % CAGR 5Yrs return %Total return(%)
REC Ltd8.73-0.68.13
Natl. Aluminium5.88-1.754.13
Coal India8.08-3.224.86
GAIL (India)4.05-5.17-1.12
Oil India5.25-3.281.97
Power Grid Corpn4.47.511.9
NHPC Ltd3.913.967.87
HPCL6.85-11.21-4.36
IOCL8.84-10.4-1.56

Therefore, as per online share market courses it would not be wise to invest in PSU or cyclical stocks that pay higher dividend as it is extremely difficult to predict cycles. So, in this blog, we will talk about such good stocks analysed by stock market courses online with certificate that will help you generate considerable dividend yield. Such companies focus on growth which results in capital appreciation.

5 Dividend stocks that give good dividend and offer capital appreciation as per share market training in Noida

HCL Technologies

HCL Technologies Ltd. provides software development business process outsourcing, information technology and infrastructure services. The company is spread across 52 countries with 200,000+ employees and a client base that includes 250 of Fortune 500 companies and 650 of Global 2000.

Collaboration with various Companies  

HCL Tech’s ecosystem consists of close to 100 companies in various technology areas. It has formed go-to-market alliances, specialist partnerships for niche technologies, and teaming partnerships for specific customers. 

Some of the partnerships/alliances are with Microsoft, Cisco, EMC, SAP, Oracle, IBM, VMware, TIBCO, HP, ServiceNow, CA Technologies, Amazon Web Services, CSC. 

Dividend

The company’s average dividend yield for the last 5 years is 2% whereas the current year average dividend yield is 3.65%.

ITC

ITC has a diversified presence in FMCG, Hotels, Packaging, Paperboards & Specialty Papers and AgriBusiness. ITC have established a vibrant portfolio of 25 world- class Indian brands that create and retain value in India. ITC’s world class FMCG brands including Aashirvaad, Sunfeast, Yippee!, Bingo!, B Natural, ITC Master Chef, Fabelle, Sunbean, Fiama, Engage, Vivel, Savlon, Classmate, Paperkraft and Mangaldeep etc. Several of these brands are market leaders in their segments

FMCG-Cigarettes

The company derives nearly 40% revenue from its cigarettes business. ITC is the leader in the organised domestic cigarette market with a market share of over 80%. It’s wide range of brands include Insignia, India Kings, Classic, Gold Flake, American Club, etc.

Agri Business

ITC is the second largest exporter of Agri products from the country. It trades in feed ingredients, food grains, marine products, processed fruits, coffee etc. It also exports leaf tobacco under this vertical. ITC is India’s largest and world’s 5th largest leaf tobacco exporter.

Paperboards, Paper & Packaging

ITC is the market leader in value added paperboards segment. It is also India’s largest converter of paperboard into high quality packaging.

Hotel Business

ITC Hotels is the second-largest hotel chain in India, with 110+ hotels at 70+ locations in the country. It possesses a room inventory of 290,000+ rooms.

Dividend

The company’s average dividend yield for the last 5 years is 2.60% whereas the current year average dividend yield is 3.43%.

Tech Mahindra

Tech Mahindra Ltd provides comprehensive range of IT services, including IT enabled service, application development and maintenance, consulting, and enterprise business solutions, etc. 

Biggest Beneficiary of 5G 

Tech Mahindra will likely be the biggest beneficiary of 5G-led demand for IT and network services. As per the management, it is the only IT services company to have a dedicated 5G and network services practice. It is the only vendor to have significant wallet share with all three greenfield network operators in the world.

  • DISH Network of US
  • 1&1 Drillisch AG of Germany
  • Rakuten of Japan. 

Tech Mahindra has a niche set of talent skilled in networks and 5G!

Tech Mahindra has setup 5G labs in Washington, Malaysia, Pune, Bengaluru and Nagpur. It started training and building talent skilled in network technologies 3-4 years ago. Currently, it trains 300- 500 people on 5G network technologies every quarter. According to management, it is best placed in the industry in terms of the depth of network technology expertise.

Dividend

The company’s average dividend yield for the last 5 years is 3% whereas the current year average dividend yield is 1.48%.

ICICI Securities

This stock is little cyclical if you want you can exclude from the list. ICICI Securities Limited is engaged in the business of broking (institutional and retail), distribution of financial products, merchant banking and advisory services.

Broking & Distribution

This company derives 89% of its revenue from broking and distribution segment. It basically means services of Investment and trading across asset classes including equity, commodity, derivatives, currency, margin trading funding, offshore investments, etc for retail as well as institutional clients and distribution of proprietary as well as third party products such as Mutual Fund, Gold Bonds, ETFs, NPS, Corporate FDs, Bond.

Market Position

The company has an 9% market share in the equities segment, and a 4% market share in the derivatives segment and SIP as of FY22. The Company is among the largest distributors of mutual funds with a market share of 22%.

Dividend

The company’s average dividend yield for the last 5 years is 3.2% whereas the current year average dividend yield is 4.88%.

Redington India

Redington is a leading distributor of products and integrated supply chain solution provider in the field of technology and communications in India as well as across the globe. Being the second largest distributor of IT products in India, it is a premier distributor of products for 200 + global technology vendors. It also leverages its presence in the field of Repairs and maintenance of technology products & Infrastructure.

Strong Partnerships

Distribution of Intel products were started by Redington in the year 1996. The Company tied-up with IBM APC and Canon for distribution of their products in the year 1998.

A distribution agreement was made between the company and Apple Computer International Pvt Ltd. Bangalore (Apple Computer) in the year 2007 for distribution of Apple’s range of products in India. The company is also India’s biggest apple products distributor currently.

As you can see from the image these partnerships still exist. The company has such strong partners in its list: Apple, Nokia, Google, amazon web services, , Red Hat, , Western Digital , HUAWEI, FORTINET, ASUS, AUTODESK, Acer, HP, Motorola ,Samsung and IBM.

Dividend

The company’s average dividend yield for the last 5 years is 1.9% whereas the current year average dividend yield is 3.61%.

Infosys Ltd.

Infosys Ltd provides consulting, technology, outsourcing and next-generation digital services to enable clients to execute strategies for their digital transformation. It is the 2nd largest Information Technology company in India behind TCS.  

Milestone achieved from FY18- FY22 

  • Digital revenue increased from 25.5% to 57%  
  • Revenue growth (cc) increased from 5.8% to 19.7%  
  • $100M+ accounts increased from 20 to 38  
  • Significant market share gain  
  • Highest TSR among peers 

(TSR -Total Shareholder Return) 

Dividend

The company’s average dividend yield for the last 5 years is 1.7% whereas the current year average dividend yield is 2.05%.

NameAverage 5 years Div Yld % CAGR 5Yrs return %Total CAGR return
HCL Technologies2%18.39%20%
ITC2.60%4.90%8%
Tech Mahindra3%15.05%18%
ICICI Securities3.20%5.91%9%
Redington India1.90%15.60%18%
Infosys1.70%23.72%25%
Average2.4%13.9%16.3%

Case Study: Investment of Rs. 50,00,000

Dividend (Yearly)= 1,20,000 (Considering the average) (50,00,000*2.4%)

But if you don’t have the time and understanding of how divided stock portfolio is to be built and don’t want to buy it yourself then you can consider investing in dividend yield funds after learning from stock market courses online with certificate. But keep a note that these funds are not required to pay steady dividends to their investors as these are growth funds, even if they invest in high dividend yield stocks.

You can also consider dividend option instead of growth option for the same funds, but the returns would be lower. Although you would get steady dividend income. Following are best dividend yielding funds as per share market training in Noida:

Fund NameAUMReturn Since Inception(%)Age of FundExpense Ratio (%)
ICICI Pru Dividend Yld Eqt Direct1,22514.188yrs 7mo0.66
HDFC Dividend Yld Fund Direct3,11225.22yrs0.43

Small Case

These small cases can also be considered for dividend investing

Unlike mutual fund which might not give dividends, Smallcase credits the dividend on the stocks held in your portfolio directly to your bank account. The returns generated by Smallcase were also quite high.

Lastly note that dividends are taxable!

Make sure if you are directly investing in dividend stocks by yourself, then buy dividend stocks when they have massively fallen. This way, you can get twin benefits, both of capital appreciation and dividend income. For example, Tech Mahindra, HCL, and Infosys have fallen quite massively recently! If you are looking for online share market courses, you can learn more about how to identify these opportunities.

But personally, we will not recommend investing in dividend funds or stocks. Why? Because India is a growth country with ample other opportunities. But dividend investing, if done properly can generate returns higher than FD.

We hope that this blog would have given you a roadmap of how to go about if you want a dividend income regularly. You would find more such informative blogs here, weekly!

In conclusion, if you are looking for stock market courses for beginners free or any other online share market courses, make sure to understand the pros and cons of investing in dividend investing. Make sure if you are directly investing in dividend stocks by yourself and buying them when they have corrected massively.

Our blogs are made for educational purposes only, and we do not provide investment recommendations. We are not SEBI-registered advisors and do not accept cryptocurrency payments. We present publicly available facts and data, not favoring any company.

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