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updated on 10 Aug 2017
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3 companies gave consistent dividend over 5 years
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3 companies gave consistent dividend over 5 years
Healthy cash flows are a prerequisite for discerning investors looking to add stocks to their portfolio. Hefty cash hoards help companies tide over difficult business cycles, even if they may not always be a big draw in a bull market.

There are only three companines which have healthy cash flows, market capitalisation over Rs 1000 crore and debt free and cash holdings equivalent to nearly 80 percent of equity funds.

Such high cash holding companies can utilize their surplus cash for expanding their business, or reward their shareholders through dividends, bonuses and buybacks.
The below dividend track record chart shows how Abbott India, Novartis India and Castrol India have a good dividend track report and has consistently paid dividends for the last 5 years.
Important points about these companies

1) How stock price has performed

How the company spends the cash that it earns through operations. And while cash flows have been strong, the gross block addition in each of the three companies has not changed much. This indicates that the companies are not investing enough back into expanding their business.

However, investors should bear in mind that companies with surplus cash may not necessarily be substantial outperformers, as evident from the chart below.
2)  Investors received consistent dividends (fixed income) returns every year rather than significant stock price upsides.

3) Sales were more or less constant year on year for the past 5 fiscals indicating that no substantial capacity expansions may have been undertaken, underscored by the flattish trend in the gross block figures as well. This can be mainly attributed to a greater percentage of profits being distributed as dividend. See chart below.