Helping You Build Wealth With Honest Research
Since 1996. Try Now

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Revealed
India's Top 3 Smallcap Stocks




**Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
**By submitting your email address, you also sign up for Profit Hunter, a Free-for-life newsletter from Equitymaster,
which offers the most profitable investing ideas in India.


AD

5 Indian Companies with Over 7% in Dividend Yield

Jul 20, 2022

Editor's note: As interest rates rise worldwide, there is a growing concern about how it may impact various asset classes.

The stock market has already corrected while gold is falling in a market it is meant to rise in. Cryptocurrencies have also taken a beating.

So, how should you ride this volatile phase? Where should you invest your money?

One investment option you could consider is upcoming dividend stocks.

During a sell-off, these stocks are available at a bargain. You can invest with a huge margin of safety so when things turn around, you have the opportunity to earn high returns.

They also are available at high dividend yields. As the share price of a dividend-paying company falls, its dividend yield rises.

In September 2021, we wrote to you about companies with over 7% in dividend yield.

These companies have a history of paying large dividends and could do so in the future as well.

Read on to know more about these stocks and what yields they are offering at present.

We have also added a new list of stocks at the end that are offering more than 7% in dividend yield.

Take a look.

5 Indian Companies with Over 7% in Dividend Yield

With interest rates hovering around 5%, people have a tough time looking for investment avenues for steady returns like fixed deposits.

Enter high dividend yield stocks.

These are stocks that provide both passive income and stable growth to those uncomfortable with the volatility and risk that equities offer.

Dividend-paying stocks allow investors to profit in two ways - stock price appreciation and pay-outs made by the company.

The benefit of buying such stocks is that the uncertainty of returns becomes low because the company pays a dividend at regular intervals.

Here are 5 companies with over 7% in dividend yield.

#1 Clariant Chemicals (11.2%)

Clariant Chemicals, (CCIL) erstwhile known as Colour-Chem, is a part of Clariant group which holds a 51% equity stake in the company.

CCIL is involved in the manufacturing of pigments, additives, masterbatches and specialty chemicals which are classified under two business segments namely plastics and coatings, and specialty chemicals.

The company faces high competition from organised and unorganised players largely due to the fragmented nature of the industry.

In its latest quarterly results, CCIL reported a 276% YoY jump in net profit. Sales also witnessed a growth of 70% YoY.

The company continues to maintain a strong financial risk profile with a debt-free balance sheet. It also has a decent dividend track record and has consistently paid dividends in the last 10 years.

CCIL's dividend yield currently stands at 11.2%.

Clariant Chemicals Dividend History - Last 10 Years

Year Dividend per share
2021 205
2020 11
2019 10
2018 5
2017 25
2016 150
2015 39
2014 30
2013 28
2012 60
Data Source: Ace Equity

Update: Clariant Chemicals has not declared any dividend for the financial year 2022.

#2 Coal India (9.9%)

Coal India (CIL) is an Indian government-owned coal mining and refining corporation. It's the largest coal-producing company in the world and contributes around 82% to the total coal production in India.

In its latest quarterly results, the company reported a 52.4% year on year (YoY) increase in net profit. The strong performance was on the back of a low base in the year ago quarter due to the pandemic.

Based on the demand for coal in the country, Coal India has envisaged a total of 1 bn tonnes in production by the year 2023-24.

To achieve this target, it has identified major projects and assessed their related issues. The capital expenditure for the year 2021-22 has been set at Rs 170 bn.

In the last ten years, Coal India has paid 18 dividends. It's dividend yield stands at 9.9%.

Coal India Dividend Payout History - Last 10 Years

Year Dividend per share
2021 16
2020 12
2019 13
2018 17
2017 20
2016 27
2015 21
2014 29
2013 14
2012 10
Data Source: Ace Equity

Update: Coal India declared a dividend of Rs 17 per share for the financial year 2022. At the current share price, this results in a dividend yield of 8.6%.

#3 Goodyear India (9.5%)

Goodyear India is engaged in the business of manufacturing and trading tyres.

The company is a leading player in the India farm tyre market. It sells its farm tyres to major tractor companies such as Escorts and Mahindra & Mahindra.

It has two manufacturing plants at Faridabad (Haryana) and Aurangabad (Maharashtra). It has nine regional sales offices across India.

In its latest quarterly results, Goodyear India reported a net profit of Rs 270 m. It had reported a net loss of Rs 40 m in the same period last year. Despite the lockdown in several areas, the company's consumer business delivered solid growth.

Goodyear has an efficient cash conversion cycle and has demonstrated good cash flow management. As a result, it has paid steady dividends to shareholders. Goodyear India's dividend yield stands at 9.5%.

Goodyear India Dividend History - Last 10 Years

Year Dividend per share
2021 98.00
2020 13.00
2019 13.00
2018 13.00
2017 12.50
2016 12.00
2015 10.00
2014 9.00
2013 7.00
2012 7.00
Data Source: Ace Equity

Update: Goodyear India paid dividends worth Rs 100 per share to shareholders during the financial year 2022. With this, the dividend yield of the stock stands at 8.8%.

#4 Polyplex Corporation (9%)

Polyplex is an Indian multinational company which manufactures polyester films for packaging, electrical and other industrial applications.

The company is an industry leader with a stable market share of about 25% in Thailand and Turkey, and around 10% in India, the US, and Indonesia.

The group's business is diversified in terms of manufacturing capacities and its revenue contribution split across regions and product applications.

In its latest quarterly results, Polyplex reported a 37.6% YoY decline in net profit. However, sales rose 24.2% YoY.

The group has demonstrated strong operating cash flow generation in the last 10 years, given its high capacity utilisation and presence in less volatile BOPET segment.

As a result, it has paid steady dividends to its shareholders. Polyplex's dividend yield currently stands at 9%.

Polyplex Dividend History - Last 10 Years

Year Dividend per share
2021 164
2020 17
2019 51
2018 40
2017 7
2016 3
2015 3
2014 2
2013 3
2012 4
Data Source: Ace Equity

Update: Polyplex announced a dividend of Rs 35 per share for the financial year 2022. With this, the dividend yield of the stock stands at 1.6%.

#5 BPCL (9%)

Bharat Petroleum Corporation (BPCL) is an Indian government-owned oil and gas corporation.

It is under the ownership of Ministry of Petroleum and Natural Gas, Government of India and operates two large refineries in Kochi and Mumbai.

BPCL accounts for nearly 14.1% of the country's refining capacity and has around 20% market share in the domestic petroleum market.

The company's high capacity utilisation at refineries ensures strong operating efficiency and its proximity to the coast ensures logistical benefit in procuring crude.

In its latest quarterly results, BPCL reported a 28% YoY fall in net profit due to a sharp rise in expenses. However, the company's sales surged 77% YoY.

As of March 2021, the company had cash & equivalents of around Rs 150 bn built-up as a result of strong operational cash flows and divestment proceeds.

BPCL's dividend yield stands at 9%.

BPCL Dividend History - Last 10 Years

Year Dividend per share
2021 21
2020 17
2019 19
2018 21
2017 33
2016 31
2015 23
2014 17
2013 11
2012 11
Data Source: Ace Equity

Update: BPCL announced dividends worth Rs 16 per share during the financial year 2022. As a result, the dividend yield of the stock stands at 5%.

Why you should invest in dividend paying stocks

Apart from the above, here's a list of stocks that are offering good dividend yields.

Stocks offering good dividend yields

Company Dividend Yield
Vedanta 17.8%
NMDC 14%
HPCL 9.7%
Hindustan Zinc 7.5%
Power Grid 7%
Source: Equitymaster

Since you're interested in dividend stocks, check out our recent editorials primarily focused on dividends:

Also check out the list of companies which have announced dividends recently and upcoming dividends.

Why you should invest in dividend paying stocks

Investing in high dividend yield stocks is a good strategy to implement when the market sentiment is bearish.

Many dividend-paying stocks, typically, are part of defensive sectors that are likely to weather heightened volatility and economic downturn better than cyclical sectors.

Businesses that don't need their profits for reinvestment and those with a clear pay-out policy seem to be safe-haven stocks in such times.

However, note that before picking such stocks, one should check the valuation as well as the dividend-paying track record of the company.

Make it a point to go through the company's financial statements and only invest in companies with sound financials.

Happy Investing!

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

Should You Invest in Smallcaps Now?

Before you make that decision, here’s something you should know...

Richa Agarwal, our top small cap analyst, has just published her report on smallcaps.

It's called Top 3 Stocks for 2023.

If you want to grab a copy of this report, all you need to do is join Richa’s upcoming mega event.

It’s Free.

Full Details Here

Disclaimer: 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...

Ayesha Shetty

Ayesha Shetty is a financial writer with the StockSelect team at Equitymaster. An engineer by qualification, she uses her analytical skills to decode the latest developments in financial markets. This reflects in her well-researched and insightful articles. When she is not busy separating financial fact from fiction, she can be found reading about new trends in technology and international politics.

Equitymaster requests your view! Post a comment on "5 Indian Companies with Over 7% in Dividend Yield". Click here!