Widely read:
The Study
There is a general perception among investors that high dividend yield stocks don't provide much growth and hence generate limited capital gains. In order to check this, we considered all the occasions over five years when investors could pick up stocks in BSE 500 that were trading at a dividend yield of more than 4 per cent. This is more than twice the dividend yield of the BSE Sensex in 2014.
Dividend yield is dividend divided by the share price. Because the latter changes daily, so does the dividend yield. If the stock price is depressed, it may appear artificially high. Since a high dividend yield is based on the past dividend, if the dividend is cut, the yield will also come down. Hence, don't get too attracted towards a high yield as it may or may not be available in the future.
Conclusion
1. If you buy a high-dividend stock, it's likely that you won't make a loss over one and three year(s). A possible reason for this could be that when stocks start showing a high dividend
yield, they have already fallen significantly and hence due to a bounce-back show positive returns in the near term.
2. While PSU stocks offer high dividends, their shares aren't wealth creators per se.
Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.
For grievances: [email protected]
Ask Value Research 
New episodes every Friday 
New Process Alert 
Seems like you've uploaded a wrong QR code. Please upload the QR code downloaded from MF Central platform.
