Home » dividends

Feasibility of Portfolio Dividend Cash Flow Goal in Year 2020

TIP Guy 23 April 2010 dividends, education, Goal 17 Comments

I have mentioned that one of my objective from my portfolio is to have dividend-based cash flow of Rs 500,000 by year end 2020. To show this feasibility, I could present a sophisticated excel based model with multiple different set of variables (i.e. make it complex). At a minimum, I know most of them would at least respect the effort. That’s how we are; we tend to appreciate complexity rather than simplicity. I like things to be simple. They are easy to understand and easy to implement. In this post, I am discussing a simple empirical exercise to demonstrate the feasibility of achieving my goal.

Before I demonstrate feasibility, following are few nuggets from Indian dividend landscape.

  • There are more than 1400 Indian companies that pay dividends
  • 2007-2008: Rs 52,150 crore is the estimated total dividends paid by Indian companies. This represents approximately 18.1% of estimated total net profits
  • 2008-2009:  Rs 51,500 crore is the estimated total dividends paid by Indian companies. This represents approximately 18.7% of estimated total net profits Continue reading rest of this article…

Investing Success Comes from Conviction and Executing Your Ideas

TIP Guy 25 December 2009 commentary, dividends, life 11 Comments

1133804_sign_success_and_failureDo you know how many people investing and/or trading in equity markets truly succeed over long term? Success here means increase in wealth over their investing lifetimes. This group of people includes individual retail folks and professionals. I am sure many of us would have no clue.  I do not have any hard core reference to share; however, I can recall reading various percentages that range from 1% to 7%. Without going in specific data points, my observation has been every time this is less than 10% of investing population. More than 90% of the folks will lose money in equity markets over their investing lifetime. Quite startling but this is very true.

We as individuals focus too much on one or two big time success or multi baggers, but ignore the importance of sustainability and consistency. We fall into the “Chalta hai” trap. Long term success is not built on few multi-baggers. Long term success is built on multiple average successes that are sustainable over time. Continue reading rest of this article…

Dividend Investing – Few Tidbits

TIP Guy 30 August 2009 dividends, education, process No Comments

1133804_sign_success_and_failureIn my last post, I discussed about two important but overlooked aspects about dividend investing. Today, I am discussing few tidbit that I have learnt over the years.

Dividends provide stability in your portfolio: Companies that are generating profitable cash and sharing with shareholders are the ones that do not go bust. Even in down market they give you cash dividends. While your portfolio’s capital values go down, your dividends are positive return to you portfolio. I crave for such a scenario. I position myself to make sure I have enough cash to buy such companies at lower valuations. I see downturn such as early 2009 as an incredible buying opportunity.

Dividends to investors cannot be manipulated: Companies demonstrate profit in their books which fuels the market price. But can you as an investor spend company profits? Profits can be generated from financial engineering, ROC or ROE can be engineering, but cash flow from operations or dividends to shareholders cannot be manipulated. As an investor you need cash to spend, and not company profits. The company you work for gives you cash (and not profit statement). Will you be willing to work for profit statement? Probably not!

Continue reading rest of this article…

Overlooked Aspects of Dividend Investing

TIP Guy 25 August 2009 dividends, strategy 5 Comments

investingThere are many different styles, approach, and methods of investing. Many individual investors focus on trading (swing, positional, momentum, speculation, technicals etc.), while many others focus of investing (value, growth, blend, etc), and still many others on special situations (opportunistic, arbitrages, etc). In addition, there are quite a few individual investors that attempt at combination of trading and investing. Similar to glass being half full or half empty, I believe every style has its own pros and cons’ depending upon in what context one is looking at it. Individuals have to figure out what works best for them.


Readers are already accustomed to my approach of dividend investing. I am a long term buy and hold investor and prefer to buy my positions at fair values (fair value calculation methodology). The reason I use fair value is because, I do have enough expertise to determine the tangible book value. While I still use book value based on Graham’s method, it is not the only one on which I base my decision.

Continue reading rest of this article…

High Dividend Yield – Good or Bad?

TIP Guy 18 August 2009 commentary, dividends 3 Comments

As always there is no simple answer and it depends on many factors. For me, it does not matter whether it is high yield or low yield. One of the key aspect that I look for in dividends is its sustainability.

Focusing on high initial dividend yield may be good for someone who wants to harvest only dividends and get out of the stock. This is a high risk preposition. The dividend cash you receive may or may not cover the stocks price fluctuations. Since I look for longer term, high yield is acceptable, if I am able to understand how the company is sustaining it. Let us take few examples.

Continue reading rest of this article…

Corporate Dividends in Emerging Markets – Some Thoughts

TIP Guy 6 July 2009 dividends, opinion 7 Comments

The creation of Pan Asia Dividend Aristocrat index by S&P is a realization that Asian economy (specifically emerging markets) will continue to grow. This is a step in right direction to recognize managements who are prudent in their cash management over a longer term of 10 years and more.

The newly created S&P Pan Asia Dividend Aristocrats consists of 31 corporations. Of these 31 corporations, only five companies are from emerging markets of China, Taiwan, and India. Many readers will view this lack of dividend growth in emerging markets (including India) as shot in the arm saying dividends does not provide significant return. My viewpoint is different. The chart, I presented earlier shows that dividends provide approximately one third of the total returns over 10+ years.

Continue reading rest of this article…

Eight Companies Confident to Raise Dividends for Shareholders

TIP Guy 24 May 2009 dividends 5 Comments

There are quite a few companies that are confident in their cash flow and profitability that they are sharing increased dividends with their shareholders. I believe this shows management’s confidence in their business prospects going into next financial year. There are many companies, but for now, below is the shortlist of eight companies for this week.

  • Visaka Industries Ltd. [2009, Rs 4.00, +33%] [2008, Rs 3.00]
  • ADF Foods Ltd. [2009, Rs 1.50 +50%] [2008, Rs 1.00]
  • Tilak Nagar Industries. [2009, Rs 2.50, +19%] [2008, Rs 2.10]
  • Keltech Energies Ltd. [2009, Rs 2.50, +100%] [2008, Rs 0.00]
  • J. K. Paper Ltd. [2009, Rs 1.75, +16%] [2008, Rs 1.50]
  • Joyti Structures Ltd. [2009, Rs 0.90, +12%] [2008, Rs 0.80]
  • Triton Valves Ltd. [2009, Rs 15.00, +20%] [2008, Rs 12.50]
  • ICI India [2009, Rs 16.00, +100%] [2008 Rs 8.00]


Below is the shortlist of companies that continue to keep their dividends flat (i.e. they have neither increased nor decreased compared to last year).

  • Everest Kanto Cylinder Ltd. [2009, Rs 1.20, flat] [2008, Rs 1.20]
  • Voltamp Transformers Ltd. [2009, Rs 12.50, flat] [2008, Rs 12.50]
  • Blue Star Ltd. [2009, Rs 7.00, flat] [2008, Rs 7.00]
  • Ajanta Pharma. [2009, Rs 2.50, flat] [2008, Rs 2.50]
  • Chambal Fertilizer. [2009, Rs 1.80, flat] [2008, Rs 1.80]
  • Zuari Industries. [2009, Rs 3.00, flat] [2008, Rs 3.00]
  • Diamines and Chemicals Ltd. [2009, Rs 1.00, flat] [2008, Rs 1.00]


Below is the list of companies that reduced their dividends. As a long term dividend (or income) investor, I would be concerned of these dividend cutters.

  • MRO Tek Ltd. [2009, Rs 1.00, -66%], [2008, Rs 3.00]
  • Bank of Maharashtra Ltd. [2009, Rs 1.50, -25%] [2008, Rs 2.00]
  • Oriental Hotels Ltd. [2009, Rs 9.00, -14%] [2008, Rs 10.50]
  • MM Forgings Ltd. [2009, Rs 1.50, -70%] [2008, Rs 5.00]
  • Ashok Leyland Ltd. [2009, Rs 1.00, -33%] [2008, Rs 1.50]


I will continue to provide similar updates every week. My end goal is to prepare a list of stocks that consistently grow dividends. We will see how this makes progress.


Page 1 of 212


~