Latest Cover Story:  Best Dividened Growth Stocks

Many investors prefer capital appreciation to dividend income and they are constantly on the lookout for such stocks that could give a better upside in a certain period of time. But what they fail to understand is that the fundamentally strong counters they select are more often than not those companies that have been paying dividends. But this fact seems to remain ignored as the focus is more on capital appreciation. However, despite this investor ignorance, time and again dividend stocks have proved their importance to the investors. In fact, we believe it is one of the most important strategies of investing in volatile or uncertain markets. The best example of this would be the global meltdown seen a year ago when stock markets globally, including India, corrected to drastic lows.

Studies And Theories

There have been some international studies done in the past which show that investors preferred stocks whose dividends had increased over time and these stocks were always viewed as good investments. In fact, the study also showed that the scrip price of companies whose dividend had increased shot up by one per cent, while the scrip prices of those whose dividend had remained stagnant or fell crashed by about 4.5 per cent.

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