Halal Dividend Stocks on Tayyib Finance
Helping Muslim investors build a halal income stream through sustainable dividend stocks.
Depending on their different characteristics, retail investors pursue either income, growth or both as a goal. Income, among them, is built by accumulating dividend stocks that return a portion of earnings to shareholders on a regular basis.
Halal income then would mean creating a portfolio of Islamic dividend stocks. This is what Tayyib Finance is meant to do: help Muslim investors create an alternative source of regular income, and one that is unquestionably tayyib, or pure.
The selection criteria for halal dividend stocks are as follows, in this order:
The basic requirement, naturally, is Shariah compliance. That is ascertained either by a stock’s inclusion in an Islamic index/fund or manual checking of a company’s business against the principles set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
The next condition is that the Islamic stock should be paying a dividend, ideally at an above-average yield — for the specific industry and geography — and with an established record of growing distributions. The absolute minimum for a dividend yield on Tayyib Finance is 4%.
On top of being Shariah compliant, a tayyib stock has to be sustainable too which automatically excludes certain industries, like fossil fuels and arms trading. Companies operating in potentially controversial areas such as mining and palm oil require closer scrutiny of their sustainability profiles.
As far as dividends are concerned, a high yield is preferable. For this reason, Tayyib Finance features more halal stocks from the emerging markets, mainly from around Southeast and North Asia since their average yields stand far above those in the developed Western markets.
Of course, since a high yield alone does not predict success in dividend investing, the regularity and growth of payouts are key considerations too. These tend to inspire confidence in the company’s financial health, performance and value, and therefore suggest a higher possibility of income growth for investors.
If you are a Muslim investor looking for dividend paying Islamic stocks, Tayyib Finance is your place to start.
Halal Dividend Stocks: Ex-US Opportunities
The ongoing trade tensions have sent ripples across international markets. While the broader sentiment remains cautious, the sharpest swings in volatility have been concentrated in the US. With investors pulling back, now is a good time to explore undervalued dividend plays beyond American borders.