Dividend yields of Indian companies have been falling for the past 10 years. The reason for this is that companies are offering less dividend than their profits. In such a scenario, foreign investors can make a short distance from Indian companies, as well as interest rates are rising across the globe.
The current annual and share price of BSE 500 companies is 1.5 percent of the current market price. According to Bloomberg's figures, it is lower than other developing and developed countries.
Russia has the highest ratio of 5.7 percent. Dividend yields average 2.9% in the world's top 10 global markets, based on market cap. The dividend payment of BSE 500 companies reached the highest level of 34 per cent in FY14. After that it is constantly falling.
In the last few months, dividends of Indian companies declined. This means that there is less growth in dividend than the increase in profits. In the last 15 years, the profit of BSE 500 companies rose by 10 percent annually, while dividend growth rate was 7 percent.
The dividend payment ratio of the companies listed in the BSE 500 Index has dropped to 19.6% in FY18. This figure is about one fourth less than the average of 27.1 percent of 15 years.
Due to rising profits and dividends globally, the ratio has improved. In the past five years, the BSE 500 index has seen an increase of 85 per cent, while Brazil, besides all other global markets, are far behind India. Low dividend yields can affect foreign investors' attitudes. Interest rates around the world are improving and due to this, they may be attracted to those markets too. In better interest rates, foreign investors rarely prefer to invest in expensive and risky stock markets.
For all these reasons, foreign investors can make distance from Indian stocks.
For more information Top 10 Stock Advisory Company Indore
The current annual and share price of BSE 500 companies is 1.5 percent of the current market price. According to Bloomberg's figures, it is lower than other developing and developed countries.
Russia has the highest ratio of 5.7 percent. Dividend yields average 2.9% in the world's top 10 global markets, based on market cap. The dividend payment of BSE 500 companies reached the highest level of 34 per cent in FY14. After that it is constantly falling.
In the last few months, dividends of Indian companies declined. This means that there is less growth in dividend than the increase in profits. In the last 15 years, the profit of BSE 500 companies rose by 10 percent annually, while dividend growth rate was 7 percent.
The dividend payment ratio of the companies listed in the BSE 500 Index has dropped to 19.6% in FY18. This figure is about one fourth less than the average of 27.1 percent of 15 years.
Due to rising profits and dividends globally, the ratio has improved. In the past five years, the BSE 500 index has seen an increase of 85 per cent, while Brazil, besides all other global markets, are far behind India. Low dividend yields can affect foreign investors' attitudes. Interest rates around the world are improving and due to this, they may be attracted to those markets too. In better interest rates, foreign investors rarely prefer to invest in expensive and risky stock markets.
For all these reasons, foreign investors can make distance from Indian stocks.
For more information Top 10 Stock Advisory Company Indore
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