Five high-dividend paying Australian miners in July
Some investors are inclined towards regular cashflows from their investments in the form of dividend . When a company makes a profit, it shares a part of those profits with the shareholders , which is called a dividend. However, companies are not obligated to pay dividends despite a profit. Also, the payout ratio, which is how much dividends are to be paid out of profits is decided solely by the management of the company. Most of the times, a company does not distribute all of its profits in the form of dividends as, some part has to be retained for future needs. Image Source: Copyright © 2021 Kalkine Media Investors prefer dividends mainly because of two reasons. First, it is a passive source of income, and second, it provides a margin of safety for the investment by the amount of dividends received. For example, if an investor receives AU$5 dividend on a AU$100 share, they would still be at breakeven, despite the stock falling to AU$95, as they have already poc...