I wanted to know, how the company pay dividends to it’s shareholders
Company ABC made a net-profit of 2000. If their dividend payout ratio is 1%. How much is payed to its dividends and where the rest of the money will go.
Check this out,
Payout is percentage of eps and not face value.
So when company says they give 1 percent as dividend is it not on the face value of the share to arrive at the inr
Company never uses the term payout.
What you mentioned is absolutely right. The dividend is quoted as a percentage of face value. But when the term ‘dividend payout’ is used, it is understood to be a percentage of EPS.
Like ITC pays out 70 percent in the form of dividend. That means 70 percent of eps.
SBI declares 500 percent dividend to shareholders. That means it’s 500 percent of face value.
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Ok got it.
Some companies have dividend payout policy. I guess Vedanta has one. Of their earnings, some percentage of dividend has to be paid. Later the same is converted as a percentage of face value.
(Your favourite company after all 
)
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So, when it is dividend payout, it is from EPS.
When it is dividend declared, it is from face value.
Am I correct ?
It is ultimately from reserves only. It’s just a way to express.
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FY 2023
Net-profit - 189.07 crore
EPS - 5.89 rupees
Payout ratio - 0.43, which is 43%
Using the below formula:
DPS = EPS * Payout ratio
DPS = 5.89 * 0.43
DPS = 2.533 rupees/share in FY2023
However, according to financial data available in TicketTape, RAILTEL has provided two dividends in FY2023
Jan 20, 2022 - ₹1.75/share interim dividend
Sep 22, 2022 - ₹0.65/share final dividend
Total dividend of 2.4 rupees/share in FY2023.
Therefore, total dividend payed as per DPS formula and actual total dividend payed as per the financial report is not exactly the same.
Can anyone clarify my doubt ?
Is Vedanta a bad pick for dividends?(6% YIELD)
I think it had some shaddy business before cause SEBI has some ongoing investigations on them this is shown in the Nudge feature of Zerodha Buy window…
Just enquiring…
I don’t track it. Also no recommendations. If you wanna know about the company, then there is only one person here. @neha1101 
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So this was the backstory behind tagging you.
Still ROFL 
after reading this part 
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Advantage of being part of this community for the past 4 years. I know whom to tag for what. 
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@neha1101 You do sound a little more into this company, maybee its because of the bad experience you faced with it… but thanks for the info it helps…
On curious note, i found a pattern with high yield stocks(>2%) they all happen to be from energy sector… any comments on those?
Or is it seasonal cause of the bull market we are in…
With regard to Vedanta - Yes - Lost money. Never bothered to study about management integrity or owner integrity. I thought all this was a farce as long as the company was giving such high dividends and a profitable company. Prior to corona the price of the stock was as high as 300plus, it started falling - it never bothered me as the dividends they were giving was stupendous, started buying to average out the price and for higher dividends.
.
Then corona hit and price fell to 80 approx, even then it did not bother me as the company was profitable and then the scrap dealer, chaparasi along with his bankers thought why not delist…at such lower value. When a retail investor hears such news, out of panic sold the shares closer to the last date, should have held on as the delisting failed.
Lost sizable amount of money at that point of time. It was Corona plus this. Then this Chapparasi owner used to come on TV and say - He was giving retail investors a option to get out…when in fact he was stealing the company from the minority owners… The independent directors were all eminent people, none said a word when the world knew what he was upto. .Even after the delisting failure, he has not stopped doing things but every thing he does comes to a standstill - The curse of the retail small time investors who believed in his dividends… I just love LIC, on the last day they said they will sell at 320, even at that time, he came of TV to tell that the delisting was a success when in fact it failed. He asked for more time from SEBI but they refused etc…
Whenever I hear a scrap buyer coming near my house shouting for old bottle, paper etc, I tell my house helper, Anil Aggarwal has come. She looks at me weirdly. Gives me lot of happiness.
Will throw mud at this group even though I have no investment in this now. This is the harm he has done to me and so many retail investors who believed in his dividend story and continued to remain invested in this company.
Coming to the point of dividend yield
Energy sector may be because they could be PSU and PSU will give out dividends as Govt needs money.
I feel TCS is a good choice for dividends as they give out every quarter dividends. My only fear is the owners own 72%, all it takes is 90% and they can delist as well…(This is my fear after the vedanta episode)
Disclaimer - I am super negatively biased on my view on Vedanta - This is only because I lost money - So please do your own research - this company might be good. One well known host in Zee TV then said - Vedanta is only good for Institutional investor and not for retail investors.
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Yes, coalindia, vedanta, etc. Energy sector is usually like that.
Govt is biggest investors in these companies. Coalindia, power stocks, etc. They get huge revenue through dividends. They have lots of surplus cash through
The company will pay $20 in dividends to its shareholders. (2000*1%)
The remaining $1980 will be retained in the company for future investments or growth.