All About Dividends:
One of best way to invest in dividend stocks is the buy-and-hold strategy. That means you buy a dividend paying stock and hold it until you find another company paying higher-yield dividend for enough period of time. Basically you will have fixed income as dividends in addition to stock price gain or loss.

What you should consider to own a dividend stock forever, you want three things from that stock:
1. High yield dividends.
2. Continued payment history.
3. Payout ratio follows less than 70% on Net-income.

Dividend payments: when a company declares dividend usually quoted either as a Dollar/Taka amount or as a percentage. The Dollar/Taka amount is how much you will get paid per year on each share of stock you own. The percentage is calculated as the dollar/taka amount on each stock own divided by the current per stock price times 100 that is called dividend yield.
Yield explained: by looking at the percentage you can easily compare better investments strategy and grasp which stock will pay you most on your amount of investment. You will learn why dividends yield is crucial factor of choosing dividend paying stocks.
For example: if you purchase 100 shares of stock at $10 per share, you will have invested a total of $1,000 (100 shares X $10 per share = $1,000 invested)

How much you will get on every share of stock you own?

Let’s say a company is paying 8% dividend yield, so there will be $80 earnings on your investment of $1,000 (1,000 invested X 8% = $80) $80 dividends per year.

This means that this stock pays you $.80 for every shares of stock you own (earnings $80/100 shares). Now, if another stock also paying $.80 per share, but the stock price of that stock is $20 per share. In your $1,000 investment you will have 50 shares a price of $20 per share. On your $1000 investment, on this second company you will earn ($.80 X 50) $40 every year.
Let’s calculate the yield of second stock, it pays $.80 per share, and its share price is $20. So, the yield is (.80X100/20) 4%. Your plan is to get highest return on a fixed of $1,000 investment, keeping this strategy well-planned you can see that you get 100 shares on a first stock and 50 shares on a second stock, but both pay you exactly $.80 per share you own. In this scenario, you can comprehend which stock will pay more earnings with the $1,000 investments because of highest yield with same amount of payment per share.

Only your yield matters: note that the only thing matter is the yield for the price that you bought at. Even if the price of the stock goes up or down after you have bought it. You will earn same amount of money because you still own the same number of shares. So, the key is to compare their yields.

Trend of continued payment: your only concern is to minimize the risk on every penny you investment. Then you research high-yield paying dividend stocks those companies have record of paying dividends for at least 4/5 years. History of dividends payment in the past for years most likely will continue to pay in coming years. Owning a share of stock is the same as owning a piece of a company. The dividends are paid out of what a company earns in Net-income and have savings. If a company does not have growth in net-income or enough cash savings in balance-sheet how long will a company continue to pay dividends? So, it is important that a company is able to pay dividends based on their profits over a year, and you want to make sure their payout is less than they earn in income. One way to determine this is by checking the stock’s payout ratio.

Payout Ratios explained: the payout ratio is the amount a company pays in dividends divided the company’s income. Let’s say a company pays out $1,000 worth of dividends and earns $10,000 income end of the year, then it’s payout ratio is

10% ($1,000/$10,000 income times 100).

Now, if a company’s payout ratio greater than 100% means that the company is paying out more in dividends than they make in income. Think carefully about how long a company could continue to stay in business if they spend more money than they make. Obvious answer is not very long. And definitely not forever, which is how long you expect to own the stock.

Sustainable Payout Ratio: a sustainable payout ratio is generally considered less than 75%. That means a company pays dividends to investors out of 75% its income and remaining 25% of income is going to company’s reinvestment plan. A company needs enough cash to create new products, advertise to new customers, new business plant, and generally just keep continuous business growth. If no reinvestment is made then the company’s income could shrink over time.

What would happen when company’s income shrinks? How much would it hurt keeping business same phase of expansion? It shows that if company’s income slows down that will lead the payout ratio for the stock to go up. Let’s say that the above company’s income drops to $5,000 from $10,000 over year and its payout payment is same $1,000 as before.

$1,000 dividends / $5,000 income = 20%.

So it is very important for a company to maintain growth in business expansion and its net-income by reinvesting in itself.

There should be a cap to maintain reasonable payout ratio which is standard for most companies. A payout ratio of 75% or less also provides a cushion for the company in case of hard times arrives. As economy slows down, most companies’ income also go down. If a company is paying 100% of the previous income as dividends, then they will have to lower the total dividends payment to match the current income.

What is P/E and why investors often calculate company's P/E?
Many successful investors use P/E ratio to find out what the market is paying for a company's earnings at any given time. Any one can understand easily and calculate P/E as a company's price-per-share divided by its earnings-per-share. Let's say BATASHOE is trading at 160 taka per share in the market, for instance, and earnings came in at 8 taka a share over the year, its P/E would be 20 (160/8). That means investors are paying 20 taka for every 1 taka of the company's earnings. In this example, investors are willing to pay extra 20 taka every one taka in BATASHOE's earning. It is some point crucial to find out how much investors willing to pay a best and blue chips companies stock according to their earnings. Let's say, there are 20 blue chips companies and how much their stocks are selling at current market and how much  their earnings per share that will give us to calculate P/E which could be an industry standard  market paying based on company's earnings. 

According to DSE's average market index investors are willing to pay about 13.2 Taka on every taka a company earns in per share. Following table provides which company's'  P/E are lest than 13.2 which could be advantage for investing because market feels there is extra room and pay 13.2 taka for each 1 taka earnings. In addition, following companies are providing at least 15% of or more dividends that could be
potential of investment by analyzing fundamental perspective. There are 19 companies are selected based on their P/E and percentage of dividends.
 

Sl	Name	Category	P/E	Earning Per Share	DPS
No
1	Apex Spinning.	A	3.23	57.01	18%
2	Eastland Insurance	A	3.38	57.33	10%,20%B
3	Uttara Finance	A	3.54	144.5	25%
4	1st Lease International	A	3.89	74.11	20%B
5	Keya Detergent	A	4.33	3.95	10%,1R:10
6	United Leasing	A	4.35	127.74	32%,50%B
7	Pharma Aids	B	5.15	131.74	25%
8	Aramit	A	5.27	10.48	37%
10	Export Import (Exim) Bank	A	5.33	63.19	30%B,1R:2
11	Rupali Insurance	A	5.36	27.98	15%B
12	BEXIMCO	A	5.73	6.2	5%,10%B
13	Eastern Insurance	A	5.73	32.27	25%B
14	Prime Finance & Invest.	A	5.76	48.79	30%B
15	Pubali Bank	A	5.88	143.36	200%B
16	Green Delta Insurance	A	5.94	65.21	40%B
17	In Tech Online Ltd.	A	6.04	2.42	15%B
18	Jamuna Bank	A	6.13	46.58	1.5%,25%B
19	Phoenix Insurance	A	6.63	31.45	25%B

 Those Companies have long history of paying at least 15% of dividends for last six consecutive years are listed following. Investing in
 following companies could be potential of almost risk free earning with fix rate.