Stock Ideas

This dividend strategy is rewriting the rules for Indian investors

Find out why investing in high-yield stocks might not fetch you stable regular income and what you should do instead

Value Research Stock Advisor’s dividend growth investing portfolioAI-generated image

dhanak हिंदी में भी पढ़ें read-in-hindi

Chasing high-dividend-yield stocks for regular income? Odds are, you've been disappointed. The income wasn't steady, the stock prices didn't budge, and your overall returns? Underwhelming.

But here's the thing—it may not be your fault. Dividend investing in India plays by different rules than in markets like the US. Why? Because India is an emerging market where growth takes precedence. For most Indian companies, reinvesting profits into expansion—not doling out dividends—is the smarter move.

And those high-yield stocks? They're often stagnant businesses with no growth story—propping up their numbers with payouts that won't last.

The truth is, the traditional dividend strategy doesn't cut it here. What works? A strategy that fits India's market realities: Dividend growth investing. Let's unpack it.

Why dividend growth investing is the smarter play

Dividend growth investing flips the script. Instead of chasing the highest yields, you focus on companies that grow their dividends consistently over time.

These are financially sound businesses with:

  • Earnings growth: Rising profits to sustain dividend increases.
  • Balanced payouts: Enough retained earnings for reinvestment while rewarding shareholders.
  • Strong cash flow: Dividends backed by real money, not promises.

This strategy gives you the best of both worlds: rising income and growing wealth.

The Britannia effect: Proof it works

Want proof? Look at Britannia Industries.

Back in FY14, Britannia paid Rs 6 per share in dividends. Fast forward to FY24, and that number has grown 12x to Rs 73. But that's not the best part. While its dividends soared, Britannia's stock price grew 18 per cent annually.

What does that mean for investors? A Rs 10 lakh investment in Britannia in FY14 would now be worth around Rs 53 lakh—and that's not counting the Rs 10 lakh you'd have earned in dividends along the way.

That's the power of dividend growth investing: your income grows, your wealth compounds and your financial future gets brighter every year.

How you can use the dividend growth strategy

It starts with finding companies that consistently grow their dividends—businesses with strong earnings, solid cash flows, and a commitment to rewarding shareholders. But finding these hidden gems isn't easy. It takes time, research, and expertise to separate the winners from the rest.

That's where Value Research Stock Advisor's Dividend Growth Portfolio comes in—a ready-to-use solution designed to help you implement this strategy effortlessly.

How to use our Dividend Growth Portfolio

Our Dividend Growth Portfolio is a curated collection of 10 stocks that embody the principles of dividend growth investing: rising income, strong fundamentals, and long-term potential.

Here's how you can use it:

  • Monthly SIP: Start small and invest consistently. Use our Investment Planner to set your preferred weightages for each stock, and it will calculate exactly how many shares to buy. All you have to do is execute the trades through your broker!
  • Lump sum investment: If you prefer a one-time investment, we've got you covered. Whether you want to deploy your funds immediately or spread them out, our experts will guide you on the best approach.

And here's the best part: the portfolio is updated monthly. If a stock no longer meets our rigorous criteria, it's replaced with a better option. This ensures your portfolio remains optimised, no matter how markets move.

What else we offer

Subscribing to Value Research Stock Advisor unlocks much more than just the Dividend Growth Portfolio. Here's what's in store:

  • 60+ live stock recommendations.
  • Two more ready-to-invest portfolios:
    • Long-term Growth Portfolio: For steady, resilient wealth creation.
    • Aggressive Growth Portfolio: For the high-risk-high-reward investor looking for explosive growth.
  • A new stock recommendation every month.
  • Smart tools to analyse, optimise, and manage your investments with ease.

And here's the best part: you can access all of this for just Rs 18,990 for three years—a massive saving of Rs 16,810 off the regular price of Rs 36,000. Plus, with our 30-day membership fee-back policy, there's no risk in giving it a try.

Stop chasing dividends. Start growing them.

Join Stock Advisor Now

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