Up To 9% Dividend Yield: Top 5 Dividend Paying Stocks In Nifty Smallcap 100 Index; RITES, NALCO, GNFC In List

The year 2023 is a little over two weeks away from ending. This year has been filled with exponential growth in the market especially in smallcap stocks. Not just that many smallcap firms also rewarded their shareholders with hefty dividends.

Here is a list of the top 5 dividend-paying stocks in the Nifty Smallcap 100 index. These stocks' dividend yields have increased in the past five years.

1. IDFC:

This p-smallcap company in the infrastructure finance segment has paid dividends up to 110% amounting to Rs 11 per share. This is multi-fold higher than the dividend payout of 10% aggregating to Re 1 each.

IDFC has a consistent track record of paying dividends. As per Trendlyne data, the company has delivered about 16 dividends since July 2006.

On the current market price, the stock's dividend yield is at 8.99%. Its 2-year and 5-year trailing dividend yield are at 4.91% and 2.48% respectively.

Currently, IDFC's share price is at Rs 122.20 apiece, which is close to its 52-week high of Rs 133.75 apiece. YTD, the stock zoomed by 44.5%.

IDFC was set up in 1997 to finance infrastructure, focusing primarily on project finance and mobilization of capital for private sector infrastructure development.

2. National Aluminium Company:

The second best dividend yield stock in the smallcap basket will be NALCO which has paid a series of dividends in 2023 so far. For FY24, the company turned ex-dividend on November 22 for an interim dividend of Re 1 per share or 20%. Also, the company's overall 90% dividend to Rs 4.5% per share for FY23 in the current year.

NALCO is among the highest dividend-paying stocks which is government-backed. As per Trendlyne data, the company delivered 46 dividends since August 2000.

Currently, its dividend yield is at 5.56%. While its 2-year and 5-year trailing dividends stood at 5.05% and 4.60% respectively.

On BSE, the stock is currently at Rs 98.90 apiece, nearing towards its 52-week high of Rs 106.30 apiece. YTD, the stock has zoomed by over 18%.

NALCO is an Indian public sector company engaged in integrated and diversified operations in mining, metal and power.

3. Redington:

Holding a consistent dividend-paying record for the last 5 years, Redington in 2023 so far has paid dividends up to 360% amounting to Rs 7.2 per share.

Since July 2007, Redington has declared up to 20 dividends, as per Trendlyne data. The stock's current dividend yield is at 4.15%, while its 2-year and 5-year trailing dividend yield are at 3.97% and 2.70% respectively.

Currently, the stock price is at Rs 174.80 apiece. However, the share price's YTD performance is lower by 7%.

Redington is a thriving $9.92 billion technology solution provider with a network of 290 international brands in the IT and mobility spaces across 38+ markets.

4. Gujarat Narmada Valley Fertilizers & Chemicals:

This fertilizer company has paid up 300% dividends aggregating to Rs 30 per share to its shareholders in 2023. As per Trendlyne data, the company has so far declared 22 dividends since July 2001.

At the current market price, the company's dividend yield is at 4.10%. Meanwhile, the company's 2-year and 5-year trailing dividend yield is at 2.74% and 1.64% respectively.

Currently, the stock price is at Rs 729.05 apiece. YTD, the stock has gained by over 30%.

GNFC started its manufacturing and marketing operations by setting up in 1982, one of the world's largest single-stream ammonia-urea fertilizer complexes. Over the next few years, GNFC successfully commissioned different projects - in fields as diverse as chemicals, fertilizers and electronics.

5. Rites:

This Navaratna company has paid a series of dividends for both FY24 and FY23. For the current fiscal, the company turned ex-dividend on November 8th for an interim dividend of Rs 4.50 per share or 45%. In FY23 alone, the company paid dividends up to 205% amounting to Rs 20.5 per share.

As per Trendlyne data, the company's current dividend yield is at 4.02%. This has increased from its 2-year and 5-year trailing dividend yield of 3.95% and 3.38% respectively.

Currently, the stock price is at Rs 503.90 apiece. YTD, the stock has advanced by over 47% on BSE.

RITES is a leading player in the transport consultancy and engineering sector in India and uniquely placed in terms of diversification of services and geographical reach in various sectors such as railways, highways, urban engineering (metros) & sustainability, airports, ports, ropeways, institutional buildings, and inland among others.

Why Invest In Dividend Stocks?

According to Angel One's website, there are three benefits for dividend stocks. These are:

Allows the company to maintain its cash reserve: By issuing dividend stocks, listed companies are enable to maintain their existing cash reserves. As this type of dividend payment requires zero cash transactions, the company can use its current cash reserve for investment and business purposes.

Tax implications for issuing dividend stocks: For individual shareholders, stock dividends involve zero tax consideration when receiving additional stocks. There are tax implications - either as short-term capital gains tax or long-term capital gains tax - only when such stocks are subsequently sold for a profit. Conversely, cash dividends have tax implications.

Makes the stocks more affordable for common investors: Once the company announces dividend stocks, it results in a decrease in the market value of shares. This can make the stocks more affordable to common investors, thereby encouraging them to purchase such stocks. In other words, it can allow the company to maintain an investable price range.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.