Dividend Paying Stocks in February 2023

Dividends are rewards paid by companies to shareholders for investing in them. So, it helps bolster your earnings by creating a stream of income. Because of it, companies which pay regular dividends enjoy high demand.

Dividend stocks are great for diversification and adding stability to your portfolio. But before we list the upcoming dividend stocks, let’s refresh our memories on ‘what are dividends?’ for everybody’s benefit.

What are dividends?

In financial terms, dividends are rewards, cash or any other form that a company pays its shareholders. Dividends are the distribution of profit. 

When a company is earning profit or surplus, it pays a portion to investors. The remaining amount gets re-invested to fund future growth. 

Dividends are paid more commonly by big companies which can’t re-invest all their profits into the business. So, they distribute a portion among investors as a reward for holding their stocks.  

Dividend yield shows how much a company is paying as a dividend relative to the price per share. You can calculate which company is paying higher dividends with the dividend yield formula.  

Companies pay dividends on preferred and common stocks. However, unlike preferred shares, the dividend payment is not assured for common stocks.

The amount depends on the number of shares and not on the value of your holding. Because of it, dividend yield fluctuates based on the stock’s current market price.

Companies can pay dividends in cash or stocks or ‘scrip dividend’, quoted per-share basis or as a percentage. 

For instance, if a company announces 5% or 0.05 per share dividends, investors will receive one share for every twenty shares they hold.

Dividend stocks in February 2023

Following are the upcoming dividend stocks.

Tax on dividend 

Until the assessment year 2020-21, the domestic companies paying dividends were liable to pay Dividend Distribution Tax (DDT) under section 115-O. Investors used to receive the dividend after the DDT was deducted at the source. However, the government eliminated DDT after March 31, 2021. For all dividends issued after April 04, 2021, dividends have become taxable in the shareholders’ hands. The interim dividend is chargeable in the hands of shareholders on a receipt basis. 

Final words 

Did you find the article on upcoming dividend stocks helpful? Dividend calculation doesn’t get impacted by the stocks’ market price, and some companies may pay dividends even when the share price is declining. We recommend that you research the suitability of these stocks in your overall investment style before buying, and to store them, open a Demat account.