Further Thoughts on Dividend Yields — Real World Experiences With TELCO and INDGAS

by Vinaya HS on August 27, 2012

in Finance

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About three months back, I first wrote about the possibility of including high dividend yield stocks as one component of my early retirement portfolio. That combined with the little known fact that D has a keen interest in equity trading (seriously, she just started trading one day out of the blue and has become quite adept at it now) meant that I was passively watching — for some real world experience — if anything in D’s portfolio would yield dividends.

By chance, and I’m really lucky here, that happened twice.

First, TELCO with an average purchase price (including the trading cost of buying) of Rs 239.31 gave a dividend yield of 1.67% (Rs 4 / Rs 239.31).

Second, INDGAS with an average purchase price (including the trading cost of buying) of Rs 227.66 gave a dividend yield of 2.20% (Rs 5 / Rs 227.66).

Paltry? Yeah! (That annuity plan we recently tore apart was much much better.)

The other problem is that dividends are most often a once-in-a-year event while I’m looking at a steady monthly income. Or maybe I should consider having a few such annual payouts in my portfolio as booster income? Or maybe I should just give D a separate corpus and ask her to generate a target monthly income [from profits, say Rs 1,000 per month for every Rs 100,000 invested] through equity trading and have that feed into my ere portfolio?

More thoughts to chew upon.




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{ 4 comments… read them below or add one }

Indian Thoughts August 27, 2012 at 8:09 PM

This is something interesting. I have always een people talking about dividend yielding stocks. It will be great if you continue sharing your experience with same.

Rakesh August 27, 2012 at 10:36 PM

I guess instead of looking out for dividend yield stocks it would be better to stick with large-caps. They will always outperform the index in the long run.

Vinaya HS August 28, 2012 at 6:49 AM

@Indian Thoughts –

I shall do that. The biggest question by far that I have is — “Will dividend yields ever be at the same level as what you can make off other investment avenues?” Given that interest rates on our debt investments are so high, does dividend yield investing stand a chance?

Compare this with the rest of the world where interest rates are either very low or even negligible and suddenly even a 2% – 3% dividend yield starts looking extremely attractive.

Vinaya HS August 28, 2012 at 7:47 AM

To add, INDGAS is trading at what seems to be a good discounted price. Were it at its usual 300+ range, the dividend yield would have been worse.

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