Dividends for the win!

Everybody likes getting the news that they’ve got some dividends on the way! (Yes please!) As you may know by now, a dividend is a sharing out of a portion of a company's profits to its shareholders. Warren Buffett, a super smart and rich investor (big deal), likes investing in dividend paying companies and then re-investing his dividends to boost his returns. Some people prefer to use dividend pay-outs as a way to earn passive income; getting little chunks of money throughout the year that they can supplement their income with (ehem, Christmas presents?). 

We’ve had a lot of requests for a list of all the JSE listed companies that pay dividends, so we listened and here it is! But it’s not as simple as picking a few companies at random – you need to be a little more strategic about it if you want to get the best bang for your buck. You also need to remember that dividends aren’t a given – a company can decide to lower or cancel dividends if times are tough, and that this info is being constantly updated.

Here are considerations you might want to make when you’re making your pick:

Cash flow – this is where your dividend pay-outs are going to come from, so a company with a strong cash flow should get some extra brownie points in your selection process. Similarly, you might want to find out if the company is in any excessive debt. This might mean they’ll want to use profit to pay that off at some point which could translate to less or no money for your dividends down the line.

Consistent growth: Companies which increase their dividend rate year on year are going to help ensure your pay-outs beat inflation. It’s also a sign that the company is going strong and would be a lower risk to you. Also check out the state of the industry they are in; if a particular industry takes a knock and a company’s share price goes down this could affect dividend pay-outs as well.

Dividend yield: This represents the amount which is being paid out as dividends relative to the company’s share price. These range from company to company and could affect the amount of risk associated with buying a particular share. Companies that are looking to grow quickly might be a higher risk to dividend seeking investors, as they’ll want to use the revenue they generate to expand. This means less is available for dividend pay-outs. Whereas bigger, more established companies take a slow and steady approach, which could offer more consistent and reliable dividend pay-outs for investors.  

Here is a recent snapshot of the JSE listed companies which plan to pay dividends in the next year. Visit Google Finance to get some more info on each stock and its current pricing. All of these shares are available on our platform. If you want to work out how much of a dividend pay-out you’d get, look at the dividends per share column and times this number by the number of shares you own in a company. Remember this info is constantly being updated, so you need to keep checking in on companies for their most recent numbers.