Question

Pick a fortune 500 company and post their dividend, their dividend yield and their overall philosophy for returning capital to shareholders? Do you believe this is a major reason why shareholders decide to buy and hold the stock? Would it be a major factor in your decision making to buy or hold a stock?

Answer 1

STATE BANK OF INDIA

DIVIDEND FROM 2015 TO 2017

TYPE	DIVIDEND%	EX-DIV DATE
FINAL	260	MAY 26, 2017
FINAL	260	JUNE 03, 2016
FINAL	350	MAY 28, 2015

FACE VALUE = 1

DIVIDEND AMOUNT 2017 = 1 * 260% = 2.6 INR PER SHARE

DIVIDEND AMOUNT 2016 = 1 * 260% = 2.6 INR PER SHARE

DIVIDEND AMOUNT 2015 = 1 * 350% = 3.5 INR PER SHARE

DIVIDEND YIELD

DIVIDEND YIELD AT 2017 = ANNUAL DIVIDEND / SHARE PRICE

= 2.6 / 288 * 100 = .90%

DIVIDEND YIELD AT 2016 = 2.6 / 200 = 1.30%

DIVIDEND YIELD AT 2015 = 3.5 / 278 = 1.26%

This company has given a fixed dividend to its shareholders every year from 2015 to 2017. It is a profit making company

Some profit-making companies give away more divided to its shareholder's some other retain their profit in the business.

Highly growing companies retain most of their profit to reserves for further investments.

In 2017 This company made a profit of 10 billion and paid 2 billion to its shareholders and retained 8 billion to its statutory reserves the case is the same in 2016 and in 2015 paid 2.6 billion to shareholders and retained 10 billion.

Yes, I believe it is a major reason for some of the investors who are retired and needed a fixed income annually or semi-annually may opt for investing in constant dividend-paying companies. Some investors who can take risk will invest more in highly growing companies which are small-cap companies.

Finally, it depends on investors need and perception towards investments. For me Yes, Highly divident paying company have a value in investors minds it will be a reward for its shareholders