What is Stock Dividends :Dividends as Passive Income

what is stock dividend ?

The simple meaning of dividend is profit after tax but for the common people assumes that dividend is a complex concept. dividend is not a complex concept it's as simple as profit.

refresh your mind and let's start topic dividend treat as passive income :


dividend is the profit after tax of the company.company collect the share capital from the peoples of the country and selective peoples invest in there share in the hope the company do better i future some times company do better and some times company take time for result.some companies like Berkshire Hathaway not give any dividend to its share holder but companies like 20 micron (in Indian stock exchange ) gives a regular dividend to it's share holders and some times interim dividend also given to it's share holder


why some company pay dividend and some company not believe in paying dividend ?

some company pay dividend because the company board of directors believe in paying dividend to attract share holders to invest in his stock to get dividend but another side some company not believe in this type of attraction strategy but it's believe in the wealth maximization of share holder's wealth but it's depend upon the attitude of market toward this types of company


and others side some company pay dividend as well as bonus shares( stored profits into the company reserves)

can we treat dividend as a passive income ?

yes, you can treat dividend as a passive income,


how to find the company that pay a dividend ?

there not justify only paying dividend but also justify good profit making company

company then firs of all find the good profit making companies the profit of companies shown in the income statement of companies in the net profit section you can find this companies in moneycontrol.com or investing .com in the form of net income or net profit

then come to profile section of that company read the company work and starting image.

analysis the sector of the company working and then come to historical section and see the history of dividend then history of dividend is by last 5 or 7 years then invest your money in this company


for you we can analyse one stock for the your reference


infosys


first step : analysis of the company financial statement in that income statement (net profit section )



there is in march 2018 profits near by 700 billion rupees then in 2019 profit achieve 826 billion rupees and then in 2020 company profits grows and touch 908 billion then overall profits grow in this company




second step :

read the profile of company, profile show in range of upper in the line of technical and financials


Industry Software & Programming

Sector Technology

Employees 242371

Equity Type ORD

Infosys Limited is engaged in consulting, technology, outsourcing and next-generation services. The Company, along with its subsidiaries, provides business information technology services comprising application development and maintenance, independent validation, infrastructure management, engineering services comprising product engineering and life cycle solutions and business process management; consulting and systems integration services comprising consulting, enterprise solutions, systems integration and advanced technologies; products, business platforms and solutions to accelerate intellectual property-led innovation, including Finacle, its banking solution, and offerings in the areas of Analytics, Cloud and Digital Transformation. Its segments are Financial Services and Insurance (FSI), Manufacturing and Hi-tech (MFG & Hi-TECH), Energy & utilities, Communication and Services (ECS), Retail, Consumer packaged goods and Logistics (RCL), and Life Sciences and Healthcare (LSH).


the company profile also good


third and last step look at company dividend paying years

when company pay every year then prefer this company




this company pays best dividend company dividend growth is best but in some years later in 2019 company gives dividend 2 times in year and hope in also 2020


company like this you prefer for investing and company also increase the wealth by increasing in his stock value



thank you for reading