As a shareholder you are entitled to a share in the company’s profits or earnings. This entitlement may come in the form of dividends. Dividends can be described as a distribution of a portion of a company’s earnings, decided by the board of directors, to shareholders and are usually expressed in cents/dollars per share. The dividend policy of a firm determines the proportion of earnings paid to shareholders by way of dividends, this is referred to as the company’s payout ratio. While the proportion of earnings ploughed back in the firm for reinvestment purposes is known as the retention ratio. A company may opt not to pay out a dividend during a financial year but rather to retain the profits generated with a view to take investment opportunities which will provide a satisfactory return on investment. However companies which are not able to identify worthwhile investment opportunities may opt to pay out a significant portion of their profits as dividends. While, for an investor, a company’s dividend history and expected future dividend payment can be a determining factor as to whether or not he purchase the shares of the particular company, this as some shareholders depend on dividend payments as a consistent source of income.
Among the companies, listed on the Jamaica Stock Exchange (JSE), 1834 Investments Limited boasts the highest dividend yield of 6.67% year to date having paid 8 cents per share while Carreras Limited (CAR) places second with a dividend yield of 6.44%. Carreras has however made the largest dividend payment of $4.30 per share year to date, following dividend payments totalling $6.70 for the 2016. Berger Paints Jamaica Limited rounds out the top three with a dividend yield of 5.36%, having made a dividend payment of 30 cents per share year to date.
The table below highlights the top JSE dividend paying stocks year to date.
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