2 Dividend Stocks To Buy After The Sharp Fall In The Markets

Stocks markets have fallen a great deal in the last fortnight or saw. In fact, from peak levels the indices are down a good 9%. This has led to some stocks becoming very cheap and resulting in good dividend yields. Here are 2 stocks to buy for their good dividend yields and sound fundamentals.

REC

REC is an infrastructure company, that largely funds the power sector in India. The stock of REC has fallen from levels of Rs 168 and is currently trading at Rs 125. In fact, the stock on Tuesday, hit a 52-week low of Rs 122. At the current market price the shares are very attractive for their dividend yields.

Last year, the company declared a dividend of Rs 12.71 per share. At the current share price of Rs 125, this results in a dividend yield of 10.27%.

The shares having fallen from levels of Rs 168, has not only improved the dividend yield, but has also made the company strong on fundamentals. The stock is now trading at a p/e of just 3 times and a price to book of 0.86 times. This is certainly cheap for a company that has a long-standing track record of consistent profitability and dividends.

Gulf Oil Lubricants

This company is one of the major players in the lubricants business in India and sells under the Gulf Oil brand. The board of directors of Gulf Oil Lubricants recently came up with a buyback of shares at a price of Rs 600 per share, as against the current market price of Rs 464.

Coming back to the dividend aspect on the stock, the share are available at a dividend yield of 3.5%. While this may not be as high as REC, what we like about the stock of Gulf Oil is also its valuations.

The shares of the company are trading at a valuation of 11 times its trailing EPS. The company recently is making forays into e lubes and also tied up with L&T industrial division to supply lubricants for its vehicles. We believe that this stock is attractively valued and hence is a good stock to buy.

Markets may consolidate at these levels

As far as the markets are concerned we believe that the stock markets would consolidate at these levels. There has been immense volatility that we are seeing over the last few weeks due to geo political tensions and also due to worries that the US Fed would raise interest rates faster than expected.

Inflation in the US has been surging and analysts believe that this could lead to the US Fed raising interest rates faster than expected. With gas prices now surging it only leaves more worries for the US Fed.

Disclaimer

Please note, investing in equities is risky. Neither the author, nor the brokerage firm nor Greynium Information Technologies would be responsible for any losses based on the above article. Markets now are highly volatile due to geo-political tensions and rising interest rates in the US. Therefore, caution is warranted at this stage. The author currently owns shares of Oracle Financial Services