InvestorQ : What matters more, the quantum of dividend or the sustainability of dividends?
Khushi Patel made post

What matters more, the quantum of dividend or the sustainability of dividends?

Answer
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2 years ago


Investors may typically wonder, “What is the ideal dividend yield to enter a stock”? Frankly, there are no clear and emphatic answers. For example if a stock gives a dividend yield of 7%, then in pre-tax terms it translates into a dividend yield of 10%. That is an extremely attractive yield. But what is more important is the consistency of dividend yield. Firstly, one needs to ensure that the dividend has been paid consistently over the last 3-4 years. Secondly, you need to adjust for special dividends and one-off dividends. Thirdly, if the company’s dividend shows an uptrend then it is a much better argument for dividend yield based buying.