It's possible to get very high dividend yields from stocks in India and sometimes these yields can be much higher than bank interest rates. Of course, sometimes investors get carried away by buying into stocks merely for the sake of dividend, which should never be the case.
We have chosen a list of stocks that do not include a one time dividend and are fundamentally sound stocks from their sectors. They are not neccesarily the highest paying dividend stocks, but are from better known companies.
The stock price of Indiabull Securities is around Rs 29. The company in 2014 has declared interim dividend around 4 times taking the total dividend to around 200 per cent. This gives a dividend yield of around 12 per cent which is way higher than bank deposit rates.
Noida Toll Bridge
Noida Toll Bridge was promoted as a special purpose vehicle company to develop construct, operate and maintain the DND Flyway on a Build Own Operate Transfer (BOOT) basis. The company has been regularly declaring dividend.
The last dividend was 10 per cent, which on a price of Rs 35, takes the yield to around 7 per cent considering that dividend will be declared in July and the holding period would be just 5 months from now.
RSWM has been consistently declaring dividends in the last few years. The company last declared a dividend of 125 per cent last year. This takes the dividend yield to near 6 per cent on a price of Rs 200.
Financially too the company has been performing well in the last many years, making it a fundamentally sound scrip to buy. The price to earnings ration is just under 5 times, while the price to book is just above 1.
NMDC is a government owned entity that is largely engaged in iron ore mining. The company is a cash rich company and hence the dividend payout has always been healthy.
The company last declared a dividend of 300 per cent on a face value of Re 1. This takes the yield to as much as 5.52 per cent. The stock is a decent stock to own and is currently trading at near 1.86 times book value.
Syndicate Bank is a government owned bank that has been regularly paying dividends. The company last declared a dividend of 55 per cent. This takes the dividend yield to a respectable 5 per cent.
Banking stocks have fallen sharply in the last few trading sessions making them worthy picks at the current levels.
|Company||Current Market Price||Dividend Yield|
|IndiaBulls Securities||Rs 29.35||12.00%|
|Syndicate Bank||Rs 117||5.00%|
While we have tried to highlight dividend yields on companies that have a good track record. There are many smaller companies who dividend yields could be higher.
However, we have completely ignored such companies and have only kept quality in mind with some consideration on key ratios like price to earnings multiples and price to book value multiples.