Markets have come off a bit and it is time to look at stocks, which offer a good dividend and also have good growth potential. Here are a few stocks that fit the bill and which investors could build their portfolio around.
This stock is a fundamentally sound stock, which is likely to see an earnings growth of 15 to 20 per cent in the next few years. The most interesting aspect of IndiaBulls Housing is the dividend yield. At the current price of Rs 699, the stock is offering you a dividend yield of near 6 per cent.
In fact, the shares of the company have fallen from levels of Rs 1440 to Rs 699 and at these levels, we see very limited downside risk, because of the yields. The shares are also trading very close to its 52-week lows.
The shares of the company have fallen largely on account of the problems in the NBFC sector, following the worries of default at IL&FS. However, as far as IndiaBulls Housing Finance is concerned, we have not see changes fundamentally.
In fact, the shares are trading at just 8 times one year forward p/e, which makes them an attractive pick at the current levels. Buy the shares from a long term perspective.
Reliance Capital has always been hammered because of the problems with the indebtedness of group company, Reliance Communications. However, if you evaluate the company per se, there is barely any thing wrong.
Reliance Capital has some solid subsidiaries including its insurance business, the asset management business, which still have decent value.
What is most fascinating is that the shares are trading at a price to book value of just 0.3 times. The company in 2018 has declared a dividend of Rs 11 per share, which as mentioned earlier takes the yield to as high as 5.55 per cent.
The shares are trading at a p/e of just 4 times, trailing EPS, which defies logic. While NBFCs are going through difficult times, we believe that there can be still some value in these stocks, though they remain risky bets. The fall in the share price has largely to do with sentiments for the ADAG group stocks.
Oil India is a company that is into drilling and exploration of oil and gas. Oil India is another good stock to buy for its dividend yield of nearly 8.73 per cent.
The board is set to meet on Feb 12, 2019 to consider interim dividend and one can expect an interim dividend of Rs 8 per share at the very least. This would take your interim dividend yield itself to near 5 per cent.
Fundamentally, Oil India's profitability remains linked to crude prices. Political intervention in the oil and gas industry remains a problem though.
What's most interesting is that Oil India shares are now trading at a 52-week low, which makes the stock attractive. The price to book of 0.66 times, also leaves significant room for appreciation. A good stock to hold in the portfolio for regular dividends.
The government owned Rural Electrification Corporation could also be a good pick for its dividends. Recently, it was in the news on reports that PFC would be buying the government's stake in REC.
Nothing much is going to change for REC though. The company offers a dividend yield of nearly 7 per cent each year. REC into financing of power and related projects.
NPAs, unlike government banks are very much under control. Buy the stock, if you are looking for good dividend yields.
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