What are the best dividend stocks for long-term investments?
Investing in stocks with healthy dividend yields and high dividend payouts is a quite stable format of investing. In a strong equity market, stock can deliver good capital appreciation (Sensex rose at a 11.8% CAGR over the last 5 years) but taking into re-invested dividends, total shareholder returns over the same period were 13.3% CAGR.
If you are betting on healthy dividend yield stocks, you should consider following things-
- One should consider stability of dividends as well while looking for stocks with high forecast dividend yield.
- One should take care to remove sector bias by adjusting the sector composition to be as close as possible to the sector composition of BSE 500.
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