MEMBER'S LOGINX
| Invalid Username / Password | ||||||||
| Invalid Captcha | ||||||||
|
||||||||
| Sign Up | Forgot Password? | ||||||||
- Home
- Views On News
- Nov 21, 2023 - Top 5 Stocks with Over 7% Dividend Yield and Cheap Valuations
Top 5 Stocks with Over 7% Dividend Yield and Cheap Valuations
The Indian stock markets are on a rollercoaster ride this year, with investors experiencing high levels of volatility.
In such uncertain times, many investors turn to dividend stocks as a source of stable income.
As a result, the valuations of dividend stocks have been rising.
However, there are some dividend stocks available at bargain prices.
Investing in high dividend yield stocks with low valuations can provide investors with the benefits of regular income and high growth potential.
Here are five stocks with dividend yields above 7% that are currently available at cheap valuations.
#1 Narmada Gelatines
First on the list is Narmada Gelatines.
The company is engaged in the manufacturing and sale of ossein and gelatine. Its products are used in the pharmaceutical, industrial, photography, and food industry.
Narmada Gelatines has been paying dividends continuously for the last 16 years.
Its dividend payout and dividend yield averaged 124.6% and 10.6%, respectively, in the last five years.
Narmada Gelatines Dividend History
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Dividend per share (Rs) | 10.0 | 10.0 | 10.0 | 10.0 | 100.0 |
| Growth (%) | 0.0% | 0.0% | 0.0% | 900.1% | |
| Dividend Payout (%) | 60.1% | 47.0% | 71.5% | 49.0% | 395.8% |
| Dividend Yield (%) | 7.5% | 6.8% | 6.3% | 5.0% | 27.4% |
To add to this, the company has zero debt and free cashflows of Rs 151.9 million (m), indicating a possible dividend even this year.
It also has strong financials with revenue growth of 8.1% (CAGR - compounded annual growth rate) driven by higher sales. The net profit has also grown at a CAGR of 8.7%.
The return on equity (RoE) and return on capital employed (RoCE) also improved and currently stand at 16.3% and 21.4%, respectively.
Narmada Gelatines Financials
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Revenue (Rs) | 1,311 | 1,398 | 1,404 | 1,606 | 1,934 |
| Growth (%) | 6.6% | 0.4% | 14.4% | 20.4% | |
| Net Profit (Rs) | 101 | 129 | 85 | 123 | 153 |
| Growth (%) | 27.7% | -34.1% | 44.7% | 24.4% | |
| Return on Equity (%) | 7.7% | 9.4% | 6.1% | 8.5% | 16.3% |
| Return on Capital Employed (%) | 10.2% | 13.4% | 8.3% | 10.7% | 21.4% |
Even with such good financials, the company's shares are trading at a price-to-equity ratio (P/E) of 15x and price-to-book value (P/Bv) of 2.5x. The industry average P/E and P/Bv are 32.8x and 3.15x respectively.
The company is expected to benefit from a growing population and increasing demand for medicines and food.
To know more, check out Narmada Gelatines' financial factsheet and latest quarterly results.
#2 Banco Products
Second on the list is Banco Products.
The company manufactures and supplies engine cooling modules and systems for the automotive and industrial markets.
Its products include radiators, charged air coolers, fuel coolers, oil coolers, and metal layered gaskets.
The company has paid dividends to its shareholders every year since 2001.
Its dividend payout and dividend yield averaged 85.7% and 9.4%, respectively, in the last five years.
Banco Products Dividend History
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Dividend per share (Rs) | 8.0 | 20.0 | 2.0 | 20.0 | 22.0 |
| Growth (%) | 150.0% | -90.0% | 900.0% | 10.0% | |
| Dividend Payout (%) | 68.7% | 186.8% | 12.6% | 93.8% | 66.8% |
| Dividend Yield (%) | 4.1% | 18.6% | 1.7% | 11.2% | 11.3% |
The company has remained debt-free for the last five years, indicating low-interest obligations, which explains the high dividends.
In the last five years, the company's revenue has grown at a CAGR of 8.3%, driven by growth across all products. The net profit also grew at a CAGR of 23.1%.
The RoE and RoCE at the end of the financial year 2023 stood at 23.5% and 31.1%, respectively.
Banco Products Financials
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Revenue (Rs) | 15,772 | 14,472 | 15,416 | 19,630 | 23,475 |
| Growth (%) | -8.2% | 6.5% | 27.3% | 19.6% | |
| Net Profit (Rs) | 833 | 766 | 1,137 | 1,524 | 2,356 |
| Growth (%) | -8.0% | 48.4% | 34.0% | 54.6% | |
| Return on Equity (%) | 10.0% | 10.8% | 13.7% | 15.5% | 23.5% |
| Return on Capital Employed (%) | 18.7% | 16.0% | 18.4% | 23.2% | 31.1% |
Coming to its valuations, the company currently trades at a P/E and P/BV of 14.7x and 3.9x, respectively, whereas the industry P/E and P/BV are 32x and 3.3x.
Going forward, the company plans to focus on developing a new range of products for electric vehicles (EVs) and expand its base in India and international markets.
To know more, check out Banco Product's financial factsheet and latest quarterly results.
#3 Styrenix Performance Materials
Third on the list is Styrenix Performance Materials.
The company manufactures, trades, and sells engineering thermoplastics. Its products include absolut abs, absolve, general-purpose polystyrene resins, and high-impact polystyrene.
The products it manufactures are used in manufacturing home appliances, automobiles, consumer durables, toys, and machinery.
Styrenix Performance Materials has regularly paid dividends to its shareholders since 2001.
Its three-year average dividend payout is 89.4%, and its three-year average dividend yield is 11.2%.
Styrenix Performance Materials Dividend History
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Dividend per share (Rs) | 2.0 | 0.0 | 10.0 | 297.1 | 104.0 |
| Growth (%) | -100.0% | NA | 2870.7% | -65.0% | |
| Dividend Payout (%) | -28.2% | 0.0% | 6,30% | 161.9% | 99.9% |
| Dividend Yield (%) | 0.3% | 0.0% | 1.3% | 21.1% | 11.1% |
It has also remained debt-free in the last three years and has a free cash flow of Rs 1.6 billion (bn), indicating a possibility of a dividend in the next financial year as well.
The company's revenue has grown at a CAGR of 13.2%, driven by diversified clientele and established market position. The net profit stood at Rs 1.8 bn at the end of the financial year 2023.
Its RoE and RoCE stood at 25.6% and 34.8%, respectively, at the end of financial year 2023.
Styrenix Performance Materials Financials
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Revenue (Rs) | 21,037 | 15,858 | 16,445 | 21,929 | 23,874 |
| Growth (%) | -24.6% | 3.7% | 33.3% | 8.9% | |
| Net Profit (Rs) | -125 | -95 | 2,802 | 3,225 | 1,830 |
| Growth (%) | -24.0% | -3049.5% | 15.1% | -43.3% | |
| Return on Equity (%) | -2.0% | -1.6% | 31.5% | 37.7% | 25.6% |
| Return on Capital Employed (%) | -0.8% | 0.4% | 42.4% | 52.1% | 34.8% |
Styrenix Performance Materials shares are currently trading at a P/E and P/BV multiple of 14.7x and 3.1x.
Going forward, the company plans to fully utilise its existing capacities and further enhance them to boost revenue.
To know more, check out Styrenix Performance Materials' financial factsheet and latest quarterly results.
#4 Cheviot Company
Next on the list is Cheviot Company.
The company is engaged in the manufacturing and sale of jute goods such as sacking, hessian, and yarn.
Apart from a strong domestic presence, it exports its products to the USA, Belgium, Netherlands, Germany, Turkey, and Saudi Arabia.
The company has paid dividends consistently to its shareholders since 2003.
Its five-year average dividend payout and dividend yield is 57.2% and 8%, respectively.
Cheviot Company also completed a buyback worth Rs 431 m this year.
Cheviot Company Dividend History
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Dividend per share (Rs) | 1.1 | 51.6 | 182.4 | 60.0 | 27.0 |
| Growth (%) | 4678.7% | 253.3% | -67.1% | -55.0% | |
| Dividend Payout (%) | 1.3% | 64.5% | 144.8% | 45.5% | 29.8% |
| Dividend Yield (%) | 0.1% | 7.0% | 26.6% | 4.3% | 2.2% |
To add to this, the company's debt is zero and has a free cash flow of Rs 423.1 m, indicating a possibility of a buyback or dividend.
Cheviot Company also delivered a decent financial performance with revenue growth (CAGR) of 6.7% and profit growth of 1.7% in the last five years.
The RoE and RoCE stand at 9.5% and 12.5% respectively.
Cheviot Company Financials
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Revenue (Rs) | 4,167 | 4,715 | 4,416 | 5,972 | 5,754 |
| Growth (%) | 13.2% | -6.3% | 35.2% | -3.7% | |
| Net Profit (Rs) | 502 | 481 | 757 | 793 | 545 |
| Growth (%) | -4.2% | 57.4% | 4.8% | -31.3% | |
| Return on Equity (%) | 8.2% | 7.7% | 11.1% | 14.3% | 9.5% |
| Return on Capital Employed (%) | 11.8% | 10.0% | 13.7% | 18.5% | 12.5% |
Coming to its valuations, the shares are trading at a P/E of 11.8x and P/Bv of 1.3x. The industry average P/E and P/Bv are 16.1x and 1.1x respectively.
This shows that the shares of the company are trading at a low valuation when compared to the industry peers.
Going forward, the company's plans to widen its international presence and increase the production of value-added products will drive its revenue and profit growth in the medium term.
To know more, check out Cheviot Company's financial factsheet and latest quarterly results.
#5 Goodyear
Last on the list is Goodyear.
The company is engaged in the business of manufacturing and trading tyres and tubes. Its products are mainly used in the automotive industry and serve major automotive companies, including Escorts and Mahindra Tractor.
Goodyear is very consistent with its dividend payments. Ever since 2007, the company paid dividends every year.
Its five-year average dividend payout and dividend yield stand at 127.7% and 6.9%, respectively.
Goodyear Dividend History
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Dividend per share (Rs) | 13.0 | 13.0 | 178.0 | 100.0 | 26.5 |
| Growth (%) | 0.0% | 1269.5% | -43.8% | -73.5% | |
| Dividend Payout (%) | 29.4% | 33.8% | 301.3% | 224.2% | 49.8% |
| Dividend Yield (%) | 1.2% | 1.5% | 19.9% | 9.2% | 2.6% |
Goodyear is also a debt-free company with free cashflows of Rs 64 m at the end of the financial year 2023.
The company also delivered a decent financial performance in the last five years. The revenue and net profit grew at 8.6% and 3.8% CAGR, respectively.
Its return ratios also improved consistently, and the current RoE and RoCE are 20.3% and 27.9%, respectively.
The shares of the company are trading at a P/E of 22.3x and P/Bv of 4.8x, compared to the industry average P/E and P/Bv of 25.7x and 2.4x, respectively.
Goodyear Financials
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | |
|---|---|---|---|---|---|
| Revenue (Rs) | 19,499 | 17,808 | 18,144 | 24,589 | 29,438 |
| Growth (%) | -8.7% | 1.9% | 35.5% | 19.7% | |
| Net Profit (Rs) | 1,021 | 888 | 1,363 | 1,029 | 1,229 |
| Growth (%) | -13.0% | 53.5% | -24.5% | 19.4% | |
| Return on Equity (%) | 11.8% | 9.7% | 16.2% | 14.4% | 20.3% |
| Return on Capital Employed (%) | 18.6% | 13.2% | 22.2% | 19.9% | 27.9% |
Goodyear is focussing on launching new products by leveraging its technological superiority to improve its market share.
To know more, check out Goodyear's financial factsheet and latest quarterly results.
Snapshot of the Financials
| Company | 1-Year Dividend Growth | 5-Year Dividend Growth | Dividend Payout 5 year average | Dividend Yield 5 year average | Price to Earnings (P/E) (x) | Price to Book Value (P/Bv) (x) |
|---|---|---|---|---|---|---|
| Narmada Gelatines | 1000.0% | 58.5% | 124.7% | 10.6% | 15.0 | 2.5 |
| Banco Products | 110.0% | 22.4% | 85.7% | 9.4% | 14.7 | 3.9 |
| Styrenix Performance Materials | 35.0% | 120.4% | 58.4% | 6.8% | 14.7 | 3.1 |
| Cheviot Company | 45.0% | 93.3% | 57.2% | 8.0% | 11.8 | 1.3 |
| Goodyear | 27.0% | 15.3% | 127.7% | 6.9% | 22.3 | 4.8 |
Before considering any company for investment, you must do your research to understand the growth prospects and risks involved.
Only invest in stocks that match your risk-taking capacity and investment horizon.
Happy Investing!
Safe Stocks to Ride India's Lithium Megatrend
Lithium is the new oil. It is the key component of electric batteries.
There is a huge demand for electric batteries coming from the EV industry, large data centres, telecom companies, railways, power grid companies, and many other places.
So, in the coming years and decades, we could possibly see a sharp rally in the stocks of electric battery making companies.
If you're an investor, then you simply cannot ignore this opportunity.
Details of our SEBI Research Analyst registration are mentioned on our website - www.equitymaster.comDisclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...
ABOUT EQUITYMASTER
Since 1996, Equitymaster has been the source for honest and credible opinions on investing in India. With solid research and in-depth analysis Equitymaster is dedicated towards making its readers- smarter, more confident and richer every day. Here's why hundreds of thousands of readers spread across more than 70 countries Trust Equitymaster.
PREMIUM PRODUCTS
QUICK LINKS
POPULAR TOPICS
- Multibagger Penny Stocks
- Basics of Value Investing
- Benjamin Graham
- How to Invest in Gold
- How to Invest in Silver
- Best Stocks to Buy Today
- Best Small-cap Stocks to Buy
- Best Bluechip Stocks to Buy
- Guide to Penny Stocks
- How to Invest in the Share Market
- Warren Buffett - The Value Investor
- Pick the Best Multibagger Stocks
TRENDING TOPICS
Copyright © Equitymaster Agora Research Private Limited.
Whitelist | Refer | Terms | Privacy | Contact | About | Sitemap
Equitymaster Agora Research Private Limited (Research Analyst)
SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Email: info@equitymaster.com. Website: www.equitymaster.com.
CIN:U74999MH2007PTC175407
Name of the Compliance & Grievance Officer: Ms Sonal Ramachandran
Telephone: +91-22-61434003 | Email: compliance@equitymaster.com
LEGAL DISCLAIMER:
Investment in securities market are subject to market risks. Read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
All rights reserved. Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.
Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.
Equitymaster requests your view! Post a comment on "Top 5 Stocks with Over 7% Dividend Yield and Cheap Valuations". Click here!
Comments are moderated by Equitymaster, in accordance with the Terms of Use, and may not appear
on this article until they have been reviewed and deemed appropriate for posting.
In the meantime, you may want to share this article with your friends!