Uncertain about stock returns_ stay with dividend payers_ top 15 names to bet on – the economic times

NEW DELHI: With the domestic equity market swinging between gains and losses, many investors have developed cold feet, unsure if they should put in their hard-earned money in stocks now or wait for better opportunity to enter the market.

Some analysts say high dividend-paying companies could be an option to take shelter now, as they tend to be consistent performers and could well turn out to be Mr Dependables.

High dividend-yielding stocks have lower volatility, which makes them a perfect fit for a portfolio in times of volatility in stocks. Today high profit shares Investors who want regular returns and are slightly risk averse tend to hold such shares.


Dividend yield is the ratio of dividend declared by a company in proportion to the current market price of the stock. Best business ideas with low investment with high profit For example, if the market price of the stock is Rs 100 and it pays an annual dividend of Rs 4, the dividend yield will come to 4 per cent (dividend/CMP = 4/100)

It represents the annualised return a stock pays out to investors in the form of dividend. Low budget high profit business The dividend yield of a stock is inversely proportional to its share price.

In a recent report, IDBI Capital listed more than 50 stocks that have been consistent performers based on various parameters such as return on equity (RoE), profit margin and a minimum market-cap of Rs 1,000 crore in last five years.

Top 15 stocks that fit the criteria of quality dividend-yielding stocks include Hindustan Zinc, Coal India, REC, L&T Infotech, PFC, MindTree, Sun TV, Kewal Kiran, VST Industries, Bajaj Corp, DB Corp, Torrent Pharma, Infosys, Swaraj Engines and ITC, among others.

“We have selected quality stocks with consistency in profits, RoE of over 15 per cent, margins and then dividend paying record for last five years along with high dividend payout ratio,” AK Prabhakar, Head of Research at IDBI Capital, told ETMarkets.com. High profit products to sell These stocks have been consistent performers in the last five years.

“In today’s scenario, fixed deposits rate are low and taxable, so it would be wise to invest in stocks that can deliver consistently in terms of profits, dividend and margins,” he said.

What makes dividend-paying stocks attractive bets? In general, most of the dividend-paying stocks are stable, which in other words means consistent performance on most parameters, including share price movement. Low investment high profit business in bangalore That is why they can be an important part of a portfolio, especially at the time of high volatility.

The basic premise of dividends makes sense. Low investment and high profit business A company pays dividend when the management feels the business is steady enough to be able to hand out dividends, regardless of how the market behaves.

“Dividend-paying stocks are generally stable. High profit margin industries Historically, prices of dividend paying stocks are less volatile than non-dividend paying ones. High profit items to sell The technical term for this is ‘Beta’: dividend paying stocks usually have a much lower Beta value than others,” Raghu Kumar, director & co-founder of Upstox, told ETMarkets.com.

“Over the past month, mostly due to demonetisation, the Sensex has fallen almost 5 per cent. High profit shares In times like these, investors seek out dividend-paying stocks. High profit crafts They know that existing holders of these stocks hold on to them because of the dividends, and because of their confidence in these businesses,” he said.

What makes dividend-yielding stocks more attractive is that investors turn to them at times when the market is on a downtrend and these are least impacted by such volatility.

When volatility increases, liquidity shifts to risk-averse assets like cash, bonds or even gold. Low cost high profit business Within equities, interest shifts towards defensive stocks and sectors with low beta values or high dividend stocks.

“High dividend stocks provide stability to a portfolio with additional capital gains during such volatile times. Low cost high profit shares As an investment psychology, they are considered an essential part of a portfolio. Small business with high profit margin in india Hence, they always provide stable capital gain in the long term,” Vinod Nair, Head of Research, Geojit BNP Paribas, told ETMarkets.com.

Criteria for choosing divided-paying stock: The first criteria to select high dividend-yielding stocks is the sustainability and earnings visibility. Low investment high profit business in kerala Robust underlying business fundamentals keeps the charm of high dividend yield intact and that is why they should be an essential part of a portfolio.

The government made it mandatory for the top 500 listed firms to have a dividend distribution policy. High profit agriculture business in india While these 500 companies have no compulsion to pay dividends, the step was taken for investors to get a clearer picture on returns from investments.

In the Union Budget for 2016-17, Arun Jaitley imposed an additional DDT of 10 per cent on individuals and companies earning more than Rs 10 lakh by way of dividends.

“Most of these companies are doing share buybacks of similar amounts that they used to pay out as dividends. Businesses with high profit margins This helps a company reduce the equity float and in turn improve valuation parameters,” Yogesh Radke, Research Analyst, Edelweiss Securities, told ETMarkets.com.

“We believe it’s another way of rewarding shareholders in the light of the new law. Low value high profit shares Often, past data of dividend payout may not hold true, as companies may opt to change the way to reward shareholders,” he said.

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