Listed companies with strong fundamentals announced healthy cash dividends for shareholders in 2013, maintaining profit growth.

A total of nine firms declared more than 100 percent divideds for investors in 2013, against seven companies in 2012, according to Dhaka Stock Exchange data.

British American Tobacco Bangladesh, Marico Bangladesh Ltd and Bata Shoe Company declared dividends ranging between 45 percent and 500 percent, DSE data showed.

British American Tobacco has reported net profits of Tk 344 crore with earnings per share of Tk 57.38 for in the nine months to September. The company saw profit growth of 16.22 percent, compared to the same period of the previous year.

Bata Shoe Company's net profits rose

12.5 percent to Tk 54 crore in the nine months to September from a year ago.

Most multinational companies (MNC) listed on the DSE also maintained a steady growth trend in dividends, said Md Moniruzzaman, managing director of IDLC Investments.

The MNCs have strong management and predictability in business, Moniruzzaman said.

Investors should focus on cash dividends, he added. "Investors will not benefit from stock dividends if announced in a bear market."

'We can realise companies' strengths, such as cash flow and earnings, through cash dividend declarations.'

Cash dividends become more attractive in a downward market as dividend yield goes up when share prices fall, said Mohammed Rahmat Pasha, managing director of BRAC-EPL, a leading stockbrokerage.

The higher dividend yield is likely to hedge against a fall in market prices for a company with consistent cash dividend payout, Pasha said.

'Because of the benefits associated with cash dividends, we have seen foreign investors invest in companies that focus on sharing profits with investors, that is, mostly multinational companies that pay out steady cash dividends." Among the foreign investors, a transparent cash dividend payout policy is also an indicator of good corporate governance, he said.

Dividend in cash is an indicator of the financial strength of a company. It is a strong fundamental indicator of the operating performance of a company. It also indicates financial flexibility. A healthy cash dividend payout also indicates the management's willingness to share profits with the investors, Pasha said.

"When a company pays out cash dividends, investors get a

portion of the company's earnings and hence, they benefit from the growth of the company."

Cash dividends can act as a source of steady income for investors if the investor invests in a company that has a steady record in paying out cash dividends, he added.

Three companies declared more than 50 to 100 percent dividends in 2013, against four companies in 2012. An aggregate of 16 companies declared more than 30-50 percent dividends in 2013, against 12 in 2012.