Dividend yields: Anytime strategy

Source: FEI

In high markets, dividend yields always look low. This is in spite of the fact that companies are expending more on dividends than ever before. Over the last five years, net profit of the Sensex 30 companies have moved up by a compounded annual growth rate (CAGR) of 23.6%, while dividend outflows have moved up by 31%.

Incidentally, the dividend payout ratio has remained more or less stable during the last five years. In 2000, the dividend payout ratio was at 30.33% as compared to 33.35% in 2005.

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