Dividend Paying Stocks: How to get double benefit from Dividend, understand the whole thing here..

Dividend Benefit: Stock market investors keep an eye on dividends. However, the dividend is a kind of reward that the company gives sometimes. This means that it is not certain that dividends will be received every year, but still, the focus of investors remains on dividends.

Many times investors also say that there has been a profit from dividends. In such a situation, the question arises of how investors are getting double benefits from dividends.

What is a dividend?
When a company is in profit, it gives dividends to its shareholders. This dividend can be in the form of cash, shares, or some other form. One thing is understood from this investors benefit from dividends. How much dividend the shareholders will get and on which day this dividend will come into the shareholders' account is decided by the company.

For example, on September 6, the shareholders of NBCC India received a dividend. Although the company had already announced the dividend, the company decided on which day the dividend would come to the shareholder's account. In the trading session in which the dividend comes to the investor's account, the company's shares trade on ex-dividend.

How does a dividend give double benefit?
The dividend does not give investors one benefit but a double benefit. Understand it like this, if you have 5000 shares of a company and you have invested Rs 20 lakh for 5,000 shares, that is, by buying each stock at Rs 400. You have had this share for 1 year and in 1 year the share gave a return of 18 percent. This means that you got a profit of Rs 3,60,000 through returns.

Now the company is giving a dividend of Rs 12 on each share. If you had 5,000 shares, then you would get a dividend of Rs 60,000. On one hand, you got a profit of Rs 3,60,000 from returns, and on the other hand, you got a profit of Rs 60,000 through dividends. In this way, you got double benefit through dividend.