4 Bluechip Stocks To Buy For Dividend Yields Of More Than 4% To 5%

Stock markets are consolidating around that 59,000 points mark on the Sensex. Even as the markets try to move higher, there is considerable selling pressure that emerges at higher levels. Here are a few stocks that you can buy and hold for their dividend yields.

ITC

The company recently declared an interim dividend of Rs 5.25 per share. The company also reported its quarterly numbers, which were exceptional. The firm reported a net profit of Rs 4056 crores, which was up 15% over the corresponding period of last year.

Based on last year's dividends, the stock at the current market price yields a dividend of 4.59%.

The company is a diversified player from cigarettes to hotels to paper boards to a mammoth presence in FMCG. At no point in time do we see the dividend payments being impacted. In fact, should the markets fall, ITC remains a perfect hedge against falling prices on account of being a diversified player with significant presence in FMCG.

Bajaj Auto

This is another stock, which at the current market prices and based on last year's dividends, gives a yield of near 4%. However, the problem for Bajaj Auto is that growth has been tepid. In fact, for the quarter ending Dec 31, 2021, the company reported a drop of 22% in net profits. The issue presently is rising raw material costs and subdued growth.

Will growth come back in the future is hard to say. However, the company has to be future ready in the sense of electric vehicles. However, the one advantage for Bajaj Auto is the huge cash and cash holdings that it has. It is also a debt free company, which is good and may never need debt at least in the immediate future.

Hard to say whether you should buy the stock, considering growth related problems at the company.

Castrol India

This is a MNC whose stock has dropped to near 52-week lows of Rs 122. The stock offers a dividend yield of 4.5% on the past year's dividend and based on the current market price. This stock like Bajaj Auto is debt free. However, it is also a multinational company whose stock p/e is around 12 times, which is cheap.

The company is one of the top players in the automotive and industrial lubricants segment.

Gulf Oil

This is another lubricants player like Castrol India. It operates in the industrial and automotive lubricants segment. The company is owned by the Hinduja group and has a track record of consistently paying dividends. At the current market price, the dividend yield on the stock if 3.42%.

The stock is also not very expensive in terms of price to earnings multiples of around 10 times.

Disclaimer

Investing in equities is risky and investors must therefore understand the risk. The author and Greynium Information Technologies Pvt Ltd would not be responsible for any losses caused based on the article.

The author and his family do not hold shares of ITC, Bajaj Auto, Gulf Oil and Castrol India. Investors should exercise caution on account of heightened volatility in the markets currently.