Dividends are voluntary profit distributions companies make to their shareholders.

They are a great way for Muslims to earn passive income.

For your convenience, Practical Islamic Finance assembled a portfolio of dividend-paying stocks we are comfortable investing in from a halal perspective.

If you’re in the U.S. you can invest directly in our portfolio here (affiliate link)

Outside the U.S. you can assemble the portfolio for yourself using the brokerage of your choosing.

Characteristics of the dividend portfolio we’ve put together are:

Dividend Yield

The dividend yield, expressed as a percentage, is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Dividend Yield = Annual dividends per share / Current share price

StockDividend Yield (Based on Share Prices 6-27-2020)
Cisco Systems, Inc.2.79%
Home Depot, Inc.2.10%
Novartis AG – ADR3.46%
NVIDIA0.08%
3M Co.3.04%
Fastenal Co.2.16%
Average2.27%
PIF Halal Dividends Portfolio

Return

The below historical 5-year return does not include dividend payouts or reinvestment, it only accounts for capital appreciation.

PIF Halal Dividends Portfolio Excluding Dividend Payments.

This compared to a ~%100 return for the S&P 500 over the same period.

On an annualized basis the PIF Halal Dividends portfolio returned a compound annual growth rate (CAGR) of 24.98%

For Comparison, the S&P 500 during the same period returned a compound annual growth rate (CAGR) of 14.28%

Volatility

The Standard Deviation is a measure of how spread out the prices or returns of an asset are on average. It is the most widely used risk indicator in the field of investing and finance.

The Standard Deviation of returns for PIF’s Halal Dividend Portfolio in the past 5 years is around 18.29%

For comparison, the standard deviation of the S&P 500 was 14.77% during the same period.

How to Invest

As mentioned, if you’re in the U.S. you can invest directly in our portfolio here (affiliate link)

Outside the U.S. you can assemble the portfolio for yourself using the brokerage of your choosing.

Before Investing, Important Disclaimers

Past performance is no guarantee of future results, which may vary.

Investing involves risk, including possible loss of principal.

The aforementioned returns do not reflect trading costs, transaction fees, or taxes.

The information on this page comes from a variety of sources we consider reliable, but we do not represent that the information is accurate or complete.

Nothing on this page is meant to constitute investment advice or recommendation, it is solely presented for informational purposes, and is not an offer to buy or sell any securities.

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