Big Dividend Yields - Restricted to PSUs - Chart Of The Day 18 June 2018 - Equitymaster

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Big Dividend Yields - Restricted to PSUs
Jun 18, 2018

Since we spoke of big buybacks, we should also be talking of the big dividend payouts. After all, this is yet another tool that companies should ideally use to distribute surplus cash. Probably more often than buybacks. But cash rich companies often pay big dividends to temporarily appease shareholders, even when the core business is under stress.

If we look at stocks with the best dividend yield (to keep valuations in context), it's the public-sector entities that continue to pay the most. And this is more likely a result of the government's need for cash than because of the companies' ability to pay out.

The dividend yields of private sector companies hardly look as attractive at current valuations.

Data Source: Ace Equity
*Special dividend in FY17

This Chart Of The Day was published in The 5 Minute WrapUp - TCS' Big Buyback Plan Cements My Prediction

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