It is interesting to note, that the only stocks that have defied the present fall in the markets are IT stocks. Demand for IT services continues to be robust, and these companies are not impacted by the domestic economic slowdown. However, there are a few other stocks that may see a very limited downside, because of the assured business prospects and dividend yield.
This stock is unlikely to fall any further, given that there is a potential dividend that is likely in the month of Feb. If like last year, the company declares a dividend of Rs 13.5 per share, your dividend yield is near 7 per cent.
This could protect against any further fall in the stock price. The company has a cash rich business, with a virtual monopoly at the present moment. While the government has opened FDI in the coal mining business, the business prospects remain protected because of the fact that India is a net importer of coal.
With a decent dividend yield, this stock should remain a part of the portfolio of most investors.
This is another stock whose downside remains protected, either because of a dividend in Oct later next month or in the month of Feb-March next year. If you go by the dividends of last year, the dividend yield on the stock works to more than 9 per cent at the current market price of Rs 210.
Hindustan Zinc is among the top two producers of zinc in the world and among the top 10 producers of silver.
The prices of zinc are also likely to rise, due to robust demand for steel from China and also due to closure of facilities in places like US and Russia. The stock is trading below 10 times one year forward multiples, which makes the same very attractive.
Bajaj Consumer Care
Bajaj Consumer Care is one of the top players in the premium oilcare segment. In fact, its Bajaj Almond Drop Hair oil is the leader in its segment and also commands premium pricing.
This stock has remained more or less steady at the Rs 250 levels in the last few days. You seldom see a stock from the FMCG space generate a dividend yield in excess of 5 per cent. Last year, the company declared a dividend of Rs 14 per share. Based on the same, the dividend yields works to 5.45 per cent.
Though the FMCG sector has witnessed a slowdown, the quarterly numbers of Bajaj Consumer Care, did not see any sharp downtick.
The company did reasonably well for the first quarter ending June 30, 2019, wherein the net profits were placed at Rs 58.66 crores, as against Rs 53.77 crores in the corresponding period of the previous year. Given that the company is in the premium segment, we do not expect any slowdown in demand and the price fall of the shares maybe limited.
All of the above mentioned stocks are also good for regular dividends. In most cases the price to earnings ratio is attractive and also is the price to book.