The Nifty has corrected a good 9 per cent from peak levels. Here are a few stocks to buy before the dividend payment season kicks-off from June to Sept, 2018. We have not selected the stocks based only on the best dividend yields, but, stocks that are reasonably valued, fundamentally sound and good on dividend yields.

Karnataka Bank

The shares of Karnataka Bank have fallen from levels of Rs 180 to Rs 120. The bank has performed much better this year and there are hopes that the bank will declare a dividend of 50 per cent at least.

While one is not sure what that dividend would be, very clearly at the current price, the divided yields could be more than 5 per cent. This is pretty decent, though dividends from the company can be volatile if crude prices rise and profitability dips.

Chennai Petroleum

Based on last year's dividend of Rs 21 per share, Chennai Petroleum gives a dividend yield of more than 6 per cent, which is now equivalent to some fixed deposit yields. In fact, dividends are tax free upto Rs 10 lakhs, whereas fixed deposits are taxed.

Fundamentally too the shares are trading at a p/e of just about 6 times one year forward earnings. Indian oil holds a majority stake in the company of almost 52 per cent. Like HPCL, the dividends can be volatile if crude oil price rises, as profitability can be impacted by rising crude prices. The stock is also trading very close to its 52-week lows.

Cosmo Films

This company has a very good track record of paying dividends for many years now. The company last declared a dividend of Rs 10 per share, which takes the yield on the stock to more than 4 per cent at the current market price of Rs 247. Fundamentally too the stock is sound and trading at a price below the book value. Apart from this, the p/e ratio too is attractive at around 7 times. Cosmo Films manufactures bi-axially oriented polypropylene films for packaging, label, lamination and industrial applications.

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