The stocks with the highest dividend yield are reflective of the dividend income that these scrips generate for their shareholders. The ratio suggests how much a company pays out in dividends annually relative to its share price and is calculated using the formula
Dividend Yield = Annual dividend per share/ Price per share
Now below is given the list of top 10 Sensex stocks with highest dividend yield, lowest price to earnings ratio (P/E) and lowest price. Notably all these parameters are in comparison to other Sensex stocks.
Lowest price and P/E denote cheap valuations of these companies and also hint at the low risk that these companies carry relative to other Sensex stocks:
|Company||Dividend Per Share (Rs)||Closing Price||Dividend Yield in %||P/E|
|Power Grid Corporation of India||10||171||5.85||8.27|
|Larsen & Toubro||14||929.6||1.51||19.54|
Pros of investing in dividend paying stocks
1. Dividend yielding stocks guarantee a steady income stream and help in building wealth over a period of time.
2. Such stocks carry low risk that non-dividend yielding stocks.
3. The company's pay-out of dividend is testimony to its belief in future earnings potential as well as business sustainability.