Dividend Stocks To Buy For Yields Of 5% To 7% As Markets Get Pounded

ICICI Securities

For the year ending March 2022 the company declared an equity dividend of of Rs 24 per share. At the current share price of Rs 437.10, the dividend yield on the stock translates to 5.49%. However, the company tends to declare dividends sometime in the month of Feb.

Now dividends aside, we also like the stock of ICICI Securities for the fundamentals that it has. In fact, the stock having fallen from levels of Rs 895 to Rs 437 has made it extremely attractive buy at the current levels. The stock is now available at a trailing p/e of just 10 times EPS. We believe that the brokerage business has the potential to see immense growth, because of an under penetrated stock investing community. Even as millenials take fancy to the markets, we believe that broking firms like ICICI Securities, with a strong parentage could do well. For investors, who wish to hold the stock for 3-years or so, the stock could offer immense opportunities. That having said, also margins are unlikely to be impacted much as the company is not a manufacturing unit, where inflationary conditions recently could impact margins. Considering a reasonable p/e and good dividend yield, the stock is good to buy at the current levels.

CESC

CESC, which is a leading player in power generation, distribution and transmission is another stock we would recommend investors to buy for its valuations and fundamentals. For the year ending March 2022 CESC declared an equity dividend of Rs 4.5 per share. At the current share price of Rs 70.80 this results in a dividend yield of 6.36%. The company has a good dividend track report and has consistently declared dividends for the last 5 years.

Again, like ICICI Securities we have seen the stock fall significantly from 52-week highs of Rs 105 to the current price of Rs 70, which makes it an attractive buy. Also, the price to earnings ratio on the stock is inexpensive at 11 times trailing EPS. Buy the stock if you are a long-term investor seeking regular dividends.

Markets may have downside risks

Markets witnessed a much needed relief rally today after posting the worst weekly loss in 2 years. "Positive global cues, fall in crude oil prices and short covering in derivatives segment drove the markets. Further, Value buying in beaten down sectors also helped market to gain some momentum today. Globally equity markets continue to remain worried over the expected aggressive rate hikes by central banks to curb record inflation and its impact on economic growth. However, on the positive side, crude prices have corrected by almost 10% from its recent peak, providing some breather to the Indian market. While the overall market set up continues to remain 'Sell on rise' - intermittent bouts of relief rally can't be ruled out. Given the hawkish commentaries from Central banks and record high inflation, rate hike cycle is likely to continue over the next couple of months and would keep markets jittery," says Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Disclaimer

Investing in stocks is risky and investors should understand the risk. Neither the author, nor Greynium Information Technologies Pvt Ltd would be liable for losses based on the above article. Markets have become volatile on account of rising interest rates and hence investors must be careful.