Government banks in India have traditionally provided good dividend yields. Over the last six months the stock prices of government banks have rallied, pushing yields lower. However, the stock prices have reacted a little in the last few weeks following scams and the arrest of the former Chairman of Syndicate Bank on bribery charges. Here is a list of stocks that offer good dividend yield.
A yield of 6.47 per cent
Andhra Bank paid a dividend of 50 per cent last year. At the current market price of Rs 77, the dividend yield works out to 6.47 per cent. Pretty decent considering that it is tax free in the hands of investors.
Yield of 4.33 per cent
Vijaya Bank paid a dividend of 20 per cent last year. If the bank maintains the same dividend the yield on the current market price of Rs 47 would be 4.33 per cent. Unlike interest income which is taxable, dividend income is tax free in the hands of investors.
Dividend yield of 4.26 per cent
Share price of Syndicate Bank has fallen sharply after the arrest of its former Chairman involving a bribery scandal. At the current market price of Rs 129, the dividend yield works out to 4.26 per cent.
Dividend yield of near 4 per cent
The dividend on the Punjab and National Bank stocks works to a near 4 per cent. The stock is currently trading at Rs 58.40.If you buy at lower levels the dividend yield can improve significantly.
Yield of 3.54 per cent
Dena Bank offers a yield of 3.54 per cent. The bank declared a dividend of 22 per cent last year and has to maintain the same dividend. Should you get the stock at a lower price the yields could go up.