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These 5 Dividend Stocks Provided Capital Appreciation Higher Than Nifty


Not many would know there is an index for the high dividend paying stocks also. But yes some of the top dividend paying stocks in India are grouped under the Nifty dividend opportunity 50 index.


All about Nifty dividend opportunity 50 index

All about Nifty dividend opportunity 50 index

Now talking about the index as of April 30, 2021, the index has 50 companies. At the time of rebalancing of shares/ change in index constituents/ change in investible weight factors (IWFs), the weightage of the index constituent (where applicable) is capped at 10%.

Coming on to why this index can be of interest to investors is that the index is designed in order to give investors' an exposure to high-yielding companies which at the same time offers stability and tradability requirements.

So, for now we shall discuss that while dividend paying stocks are considered to provide stability during volatile periods and also offer a secondary source of income, they can even offer capital appreciation as in the current time with respect to benchmark indices.

Performance of the dividend index in comparison to Nifty

Performance of the dividend index in comparison to Nifty

On a year to date basis, while the Nifty Dividend Opps 50 index gained by 12.96 percent, Nifty during the same period was up by 11.11 percent. As per the NSe report as on April 30, 2021, the index return since inception have been 8.51% (price return), while total return is at 11.30 percent.

Components of Nifty Dividend Opp 50 index with the top weightage

StocksWeightage (in percentage)
TCS 9.8
ITC 9.73
Infosys 9.71
HUL 9.61
Larsen and Toubro 9.32
Tata Steel 4.63
Tech Mahindra 3.43
Nestle India 3.35
Power Grid 3.25
Bajaj Auto 2.87

Dividend yield stocks that have offered way better return than the Nifty index:

Dividend yield stocks that have offered way better return than the Nifty index:

Note here while for the purpose of comparison we have considered YTD returns, long term data since 2007 as per data from Bloomberg shows that while the Dividend opportunities index has offered an annual return of 11.3 percent, Nifty has fetched 8.9 percent (taking into account both capital appreciation and dividend)

1. Tata Steel:

Tata Steel from the dividend index is a stock which in line with other metal stocks has run up quite substantially. This stock on a year to date basis has surged by a huge 75 percent. Other than the capital appreciation, the stock of Tata Steel declared a final dividend of Rs. 25 per share for which the ex-date is June 17.

This is in comparison to Nifty's YTD return of 11.46 percent.

2.	TCS:

2. TCS:

The IT major in a Covid hit year has managed to offer a 10 percent return on a YTD basis. For the fy21, the company declared an interim dividend of Rs. 15, in respect of which the stock turned ex-dividend as on May 25, 2021.

3.	Power Grid Corporation of India:

3. Power Grid Corporation of India:

This power generation and distribution company also gained an over 18 percent during the period from December 31, 2020 to May 31, 2021

4.	Infosys:

4. Infosys:

The country's leading IT firm based out of Bengaluru on rapid expansion in the digital sphere with the outbreak of Covid 19 is also performing well. During the period under review the stock has gained almost 11.5 percent. The Infosys company stock for the dividend announced for FY 21 shall turn ex-dividend today.

5.	Larsen and Toubro:

5. Larsen and Toubro:

This infrastructure company has also reaped a higher return than Nifty of 15 percent considering closing price of Rs. 1287 as on December 31, 2021.

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