Upcoming dividend stocks to watch this week: complete details inside!

Dividends represent a portion of a company's profits distributed to its shareholders as a reward for their investment.

dividends are portions of profits made by the company that are distributed to the company’s shareholders. Dividends are paid on a per-share basis. It is not mandatory to pay dividends every year. If the company feels that, instead of paying dividends to shareholders, they are better off utilizing the same cash to fund a new project for a better future, they can do so.

Typically, companies in the growth phase (young companies growing fast) choose not to pay dividends but rather to plow back the profits into the business for more growth. However, when the company’s growth opportunities slow down and it holds excess cash, it makes sense to reward its shareholders via dividends. Cash with shareholders makes more sense than retaining the cash on the company’s books, and distributing the dividends may be the best way forward for the company.

Here is a list of upcoming dividend stocks to watch this week, complete with details on each company:

Dividend Declaration and Payment Process

• Dividend Declaration Date: The board approves the dividend during the Annual General Meeting (AGM).
• Record Date: The company lists all eligible shareholders. This usually occurs 30 days after the declaration.
• Ex-Dividend Date: The date when the stock starts trading without the dividend value. Shareholders must own the stock before this date to receive dividends.
• Dividend Payout Date: The date when dividends are paid to shareholders.
• Cum Dividend: The period before the ex-dividend date when the stock includes the right to the upcoming dividend.

Impact on Stock Price

On the ex-dividend date, the stock price typically drops by the dividend amount, reflecting the cash paid out. For example, if ABC stock is at Rs 335 and it declares a Rs 15 dividend, the price will drop to approximately Rs 320.

Special and Interim Dividends

Special Dividends are one-time, usually larger, payments. They can significantly affect stock prices but indicate a cash payout to shareholders. On the other hand, interim dividends are paid during the financial year, while final dividends are paid at year-end.

Importance for Retail Investors

Dividends provide a steady income stream and indicate a company's financial health. They are particularly beneficial for those seeking regular income, such as retirees. Dividends also represent a return on investment even in volatile markets and can enhance overall returns when reinvested.

Investors must keep these stocks on their radar.

Disclaimer: The article is for informational purposes only and not investment advice.