Dividend Stocks

My father has mosrlt invested in the dividend stocks and every year he is getting a good amount of dividends. He told me to invest in the good company which gives dividend because that is actually double the profit. For example, if you would have purchased REC share for Rs 100 it would have been 5X in the last 4 years and along with thar it has given around 7-8% dividends every year.

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So the dividend stocks not only is giving the dividend but also providing you with the capital appreciation. When we have to calculate the dividends we have to see whats our buy price and then find the dividend yield. Yes the dividend yield would be less than the FD rates but again we should not actually compare both of them as they are different.

FD doesn't give you capital appreciation but the dividend stocks actually give the capital appreciation too which actually helps you to have double the profit. And of we compare it with FD it will be usually more than the FD rates.

In my case I have invested in some of the dividend stocks such as REC, PFC, ITC, IRFC etc. These stocks I am continuing buying and keeping the average less than the Current Market Peice. So when it goes up, it gives me the profit and along with that it gives me the dividend. Just like the FD, dividend are also taxed as per your income tax rate. But as I said if you are selling it after the capital appreciation then you have to pay the Capital Gain Tax too.

Overall if you are thinking of between the dividend stocks and FD then I would suggest the dividend sticks. But keep in mind that stocks comes with the high risk whereas the FD comes with Low risk.