10 Biggest Dividend Paying Smallcap Stocks of 2022. Add to 2023 Watchlist

Dividends form an important part of your investing journey. They provide a steady stream of income and help you build wealth over time.

That is why dividend investing has proven to be a successful way to retire early.

However, that doesn't mean you should jump into stocks with the highest dividend payout ratio. If a company pays out all its profits as dividends, it may not always be a good sign. It could imply there's no chance of investing the profits back into the business at a decent return.

This is why it's better to look for a company with plenty of room to increase the dividend payout in the future.

And what better place to start than smallcaps. Small-cap stocks have huge growth potential and are often sitting on the runway, waiting to take-off.

If you wisely filter the best smallcap stocks which also offer dividends, you could be on the fastest road to generational wealth.

In this article, we take a look at 10 small-cap stocks that have paid big dividends in 2022. These companies have a track record of raising dividends and also have decent fundamentals.

#1 Bata India

Bata India is not just India's but the world's leading footwear company.

The company is the world's leading shoemaker by volume, having retail presence of over 5,300 shops in more than 70 countries and production facilities in 18 countries.

For financial year 2021-22, the company paid out a dividend of Rs 54.5 per share (1,090% on face value). This includes a one-time special dividend of Rs 50.5 per share.

The special dividend payout made the company stand out this year as in the past, the company has not made such payouts. Although it is a consistent dividend payer.

Bata India Dividend History

Year End	Dividend (%)	Dividend Yield (%)	Dividend per Share (Rs)	Dividend Payout Ratio (%)
31-Mar-2022	1090.0	2.8	54.5	680.1
31-Mar-2021	80.0	0.3	4.0	-57.6
31-Mar-2020	80.0	0.3	4.0	15.6
31-Mar-2019	125.0	0.4	6.3	24.4
31-Mar-2018	80.0	0.5	4.0	23.3
31-Mar-2017	70.0	0.6	3.5	28.3
31-Mar-2016	70.0	0.7	3.5	20.7
31-Mar-2015	65.0	0.6	6.5	18.1
31-Dec-2013	65.0	0.6	6.5	21.9
31-Dec-2012	60.0	0.7	6.0	22.4

Data Source: Ace Equity

Footwear stocks have seen an uptrend in recent weeks as they posted good quarterly results.

The company reported a 71.8% rise in consolidated net profit at Rs 1.2 bn on the back of highest ever quarterly sales. The company has now witnessed a significant uptick in sales for three consecutive quarters.

Going forward, the company is looking to upscale it digital channels, and expand in tier 3-5 towns.

The company has a debt free balance sheet and has gradually recovered its profitability after the pandemic.

Financial Snapshot

Rs m, consolidated	Mar-18	Mar-19	Mar-20	Mar-21	Mar-20
Revenues	26,342	29,311	30,561	17,085	23,877
Growth (%)	11%	11%	4%	-44%	40%
Operating Profit	4,123	5,560	9,117	2,608	4,811
OPM (%)	16%	19%	30%	15%	20%
Net Profit	2,205	3,290	3,290	(893)	1,030
NPM (%)	8%	11%	11%	-5%	4%
Total Debt	0	0	0	0	0
Debt to Equity (x)	0	0	0	0	0

Data Source: Ace Equity

However, the company has been facing intense competition in all product categories. Established players have set up new manufacturing facilities, and increased capacities in their existing plants.

International brands such as Clarks, Zara, among others have also made inroads into the organised footwear market in India.

#2 Goodyear India

Next on our list we have Goodyear India. The company is engaged in the business of manufacturing and trading of tyres, tubes, and flaps. It's a leading player in the India farm tyre market.

Tyre stocks are rising and Goodyear India is not exception. It's currently trading near its 52-week high.

For financial year 2021-22, the company paid out a dividend of Rs 100 per share (1,000% on face value). This included a final dividend of Rs 20 per share and a special dividend of Rs 80 per share.

With this big dividend payout, Goodyear India also became one of 2022's high dividend yield stocks.

Goodyear India Dividend History

Year End	Dividend (%)	Dividend Yield %	Dividend per Share(Rs)	Dividend Payout Ratio (%)
31-Mar-2022	1000.0	11.3	100.0	224.2
31-Mar-2021	1780.0	20.0	178.0	301.4
31-Mar-2020	130.0	2.2	13.0	33.8
31-Mar-2019	130.0	1.4	13.0	29.4
31-Mar-2018	130.0	1.2	13.0	23.1
31-Mar-2017	125.0	1.5	12.5	22.6
31-Mar-2016	120.0	2.5	12.0	23.1
31-Dec-2014	100.0	1.6	10.0	22.8
31-Dec-2013	90.0	2.4	9.0	22.1
31-Dec-2012	70.0	1.9	7.0	28.7

Data Source: Ace Equity

The company's dividend yield (at the end of year price) for the past two years has been exceptional.

Goodyear India has come a long way into growing its dividend payouts. After a long wait of two years, the growth prospects of the tyre industry look promising on the back of strong demand and margin expansion ahead.

However, higher input prices of rubber and crude derivatives could dampen sentiment.

#3 Banco Products

Another auto ancillary company which forms part of this list is Banco Products.

Banco Products manufactures and supplies engine cooling modules and systems for automotive and industrial applications in both the domestic and international markets.

For financial year 2021-22, the company paid out a dividend of Rs 20 per share (1,000% on face value).

This dividend is much higher than the previous year.

Banco Products Dividend History

Year End	Dividend (%)	Dividend Yield %	Dividend per Share(Rs)	Dividend Payout Ratio (%)
31-Mar-2022	1000.0	14.7	20.0	93.8
31-Mar-2021	100.0	1.4	2.0	12.6
31-Mar-2020	1000.0	30.7	20.0	186.8
31-Mar-2019	400.0	5.2	8.0	82.8
31-Mar-2018	500.0	4.7	10.0	61.3
31-Mar-2017	450.0	4.0	9.0	66.2
31-Mar-2016	230.0	4.1	4.6	36.6
31-Mar-2015	150.0	2.9	3.0	24.5
31-Mar-2014	100.0	2.8	2.0	15.9
31-Mar-2013	90.0	4.4	1.8	21.0
31-Mar-2012	125.0	3.9	2.5	23.4

Data Source: Ace Equity

The company could declare such big dividend payouts in the future too as it has robust financials, along with decent cash and bank balance.

Financial Snapshot

Rs m, consolidated	Mar-18	Mar-19	Mar-20	Mar-21	Mar-20
Revenues	13,356	16,146	14,221	15,326	19,580
Growth (%)	8%	21%	-12%	8%	28%
Operating Profit	1,978	1,733	1,473	1,871	2,769
OPM (%)	15%	11%	10%	12%	14%
Net Profit	1,168	691	766	1,137	1,524
NPM (%)	9%	4%	5%	7%	8%
Total Debt	337	399	916	142	198
Debt to Equity (x)	0.04	0.05	0.13	0.02	0.02

Data Source: Ace Equity

To know more, check out Banco Products' financial factsheet.

#4 INEOS Styrolution

INEOS Styrolution is engaged in the business of producing styrenics plastic with focus on styrene monomer, polystyrene, ABS Standard, and styrenics specialties.

The company has paid a dividend of Rs 297 per share for the financial year 2021-22.

Just take a look at the table below to see how big a jump this is compared to earlier years.

INEOS Styrolution Dividend History

Year End	Dividend (%)	Dividend Yield %	Dividend per Share(Rs)	Dividend Payout Ratio (%)
31-Mar-2022	2970.0	30.5	297.0	161.9
31-Mar-2021	100.0	1.1	10.0	6.3
31-Mar-2019	20.0	0.4	2.0	0.0
31-Mar-2018	40.0	0.5	4.0	-28.2
31-Mar-2017	40.0	0.6	4.0	10.6
31-Mar-2016	40.0	0.7	4.0	10.2
31-Mar-2015	40.0	0.6	4.0	11.0
31-Dec-2013	40.0	1.0	4.0	20.1
31-Dec-2012	40.0	0.5	4.0	13.9

Data Source: Ace Equity

Not just that. For the ongoing financial year, the company has already declared another hefty payout. It declared an interim dividend of Rs 105 per share in June 2022.

Over the years, the company has benefitted from access to technology as it's a part of the INEOS group. This gives an edge in competing against large scale producers from South-East Asian countries.

In the last two years, the company's profitability has improved substantially amid a sharp rise in prices of Acrylonitrile Butadiene Styrene (ABS), Styrene Acrylonitrile (SAN), and polystyrene.

Financial Snapshot

Rs m, consolidated	Mar-18	Mar-19	Mar-20	Mar-21	Mar-20
Revenues	18,953	20,905	15,790	16,315	21,790
Growth (%)	28%	10%	-24%	3%	34%
Operating Profit	1,422	211	719	4,267	4,884
OPM (%)	8%	1%	5%	26%	22%
Net Profit	662	(125)	(95)	2,802	3,225
NPM (%)	3%	-1%	-1%	17%	15%
Total Debt	1,044	2,654	1,730	533	97
Debt to Equity (x)	0.16	0.43	0.28	0.06	0.01

Data Source: Ace Equity

Crude oil prices have remained volatile throughout this year and this is a cause of concern for the company. Acrylonitrile and styrene are the major raw materials which the company uses and both these are derivatives of crude oil.

#5 Kewal Kiran Clothing

Kewal Kiran Clothing is engaged in manufacturing, marketing, and retailing of branded readymade garments and finished accessories.

For financial year 2021-22, the company paid out a dividend of Rs 19 per share (190% on face value).

This dividend is lower if compared to earlier years. This is because the company also rewarded its shareholders with bonus shares in the ratio of 4:1.

Kewal Kiran Clothing Dividend History

Year End	Dividend (%)	Dividend Yield %	Dividend per Share(Rs)	Dividend Payour Ratio (%)
31-Mar-2022	190.0	9.5	19.0	142.5
31-Mar-2021	230.0	2.6	23.0	118.6
31-Mar-2020	430.0	6.8	43.0	72.6
31-Mar-2019	340.0	2.7	34.0	52.2
31-Mar-2018	330.0	2.2	33.0	55.6
31-Mar-2017	190.0	1.1	19.0	31.4
31-Mar-2016	600.0	3.5	60.0	108.9

Data Source: Ace Equity

Kewal Kiran is one of the best multibagger stocks of 2022. Apparel stocks have seen an uptrend in the past one year as the re-opening theme played out.

The company saw a strong demand recovery in second and third quarter of 2022 due to better footfalls and recovery in discretionary spending.

Kewal Kiran, has an established market position in the domestic menswear segment. It made the most of the recovery as it has strong brands and diversified geographic presence.

Financial Snapshot

Rs m, consolidated	Mar-18	Mar-19	Mar-20	Mar-21	Mar-20
Revenues	4,605	5,029	5,297	3,027	6,076
Growth (%)	-1%	9%	5%	-43%	101%
Operating Profit	1,193	1,343	1,126	357	1,170
OPM (%)	26%	27%	21%	12%	19%
Net Profit	732	803	724	239	822
NPM (%)	16%	16%	14%	8%	14%
Total Debt	483	935	880	464	766
Debt to Equity (x)	0.12	0.22	0.2	0.11	0.16

Data Source: Ace Equity

To know more, check out Kewal Kiran's dividend payout history.

#6 Tata Investment Corporation

Tata Investment Corporation, a Tata group company, is primarily engaged in the business of investment in listed and unlisted equity shares, debt instruments, and mutual funds.

For financial year 2021-22, the company paid out a dividend of Rs 55 per share (550% on face value). This was the highest dividend paid out by the company in a year.

Tata Investment Dividend History

Year End	Dividend (%)	Dividend Yield %	Dividend per Share(Rs)	Dividend Payout Ratio (%)
31-Mar-2022	550.0	4.1	55.0	129.9
31-Mar-2021	240.0	2.3	24.0	78.9
31-Mar-2020	180.0	2.7	18.0	100.6
31-Mar-2019	200.0	2.4	20.0	75.6
31-Mar-2018	200.0	2.7	20.0	84.1
31-Mar-2017	180.0	2.8	18.0	49.5
31-Mar-2016	170.0	3.6	17.0	48.2
31-Mar-2015	170.0	3.0	17.0	50.4
31-Mar-2014	170.0	3.7	17.0	50.3
31-Mar-2013	160.0	3.7	16.0	50.7

Data Source: Ace Equity

Tata Investment is a pure example of a dividend growth stock. The company has grown its payouts almost every year.

Tata group stocks are known to never disappoint investors and rightly so. In recent weeks, share price of Tata Investment has seen a sharp upside.

The rally is on the back of higher income which Tata Investment received through dividend, interest and profit on sale of investments. The company recently reported a 66% growth in net profit, driven by higher dividend income.

In its latest annual report, Tata Investment said it aims to invest in sector leaders with potential to remain value accretive over the medium and long term.

#7 Sanofi India

Sanofi India (Sanofi) is the Indian subsidiary of France-based pharma multinational Sanofi SA.

Sanofi SA is the ninth largest pharmaceutical company in the world by revenue. With 100,000+ employees, the company provides healthcare solutions in over 170 countries.

We first wrote to you about Sanofi India and its high dividend payout in July 2022.

In the current financial year ended 31 December 2021, Sanofi India declared a dividend of Rs 490 per share, which was also the highest payout in the company's history.

Sanofi India Dividend History

Year End	Dividend (%)	Dividend Yield %	Dividend per Share(Rs)	Dividend Payout Ratio (%)
31-Dec-2021	4,900.0	6.2	490.0	119.3
31-Dec-2020	3,650.0	4.4	365.0	175.8
31-Dec-2019	3,490.0	5.0	349.0	193.8
31-Dec-2018	840.0	1.3	84.0	50.8
31-Dec-2017	710.0	1.5	71.0	50.1
31-Dec-2016	680.0	1.6	68.0	51.4
31-Dec-2015	650.0	1.5	65.0	46.5
31-Dec-2014	450.0	1.3	45.0	39.3
31-Dec-2013	450.0	1.6	45.0	39.1
31-Dec-2012	330.0	1.4	33.0	43.0

Data Source: Ace Equity

Sanofi's dividend payout has grown consistently over the years. This is visible from the table above. The company further announced a special dividend of Rs 193 for the current year.

Sanofi India has aligned itself with India's healthcare needs by building expertise, capability, and capacity. It has done so with continued investments, strategic partnerships, and a shared commitment to patients.

The company has high visibility for growth from domestic market, a robust cash rich balance sheet, minimal capex, and a healthy cash position.

Financial Snapshot

Rs m, consolidated	Dec-17	Dec-18	Dec-19	Dec-20	Dec-21
Revenues	24,636	27,708	30,706	29,019	29,566
Growth (%)	4%	12%	11%	-5%	2%
Operating Profit	6,179	7,132	7,594	8,029	8,369
OPM (%)	25%	26%	25%	28%	28%
Net Profit	3,260	3,806	4,142	4,776	9,444
NPM (%)	13%	14%	13%	16%	32%
Total Debt	-	-	-	-	-

Data Source: Ace Equity

On the downside, key risks to growth include addition of any Sanofi's products to the National List of Essential medicines. This may adversely impact the overall performance.

The company's latest quarterly results also show weak operating performance on account of divestment of its nutraceutical business and a few key brands. Further, there is high concentration risk as a majority of revenues are generated among the company's top 10 brands.

#8 Akzo Nobel

Akzo Nobel is engaged in the business of manufacture of paints and varnishes, enamels, and lacquers. Dulux is the main brand of the company.

For financial year 2021-22, the company paid out a dividend of Rs 75 per share (750% on face value). This was the highest payout made by the company in a year.

Akzo Nobel Dividend History

Year End	Dividend (%)	Dividend Yield %	Dividend per Share(Rs)	Dividend Payout Ratio (%)
31-Mar-2022	750.0	3.9	75.0	117.6
31-Mar-2021	500.0	2.2	50.0	109.6
31-Mar-2020	140.0	0.6	14.0	26.8
31-Mar-2019	240.0	1.3	24.0	51.9
31-Mar-2018	220.0	1.2	22.0	25.7
31-Mar-2017	220.0	1.2	22.0	41.6
31-Mar-2016	700.0	5.2	70.0	152.6

Data Source: Ace Equity

As crude oil prices are falling, Akzo Nobel is in a sweet spot. Crude derivatives form about 40% of raw material costs for large paint companies like Akzo Nobel.

Akzo Nobel share price is currently trading at Rs 2,167 and has a 52-week high of Rs 2,319.

To know more, check out Akzo Nobel's financial factsheet and its latest quarterly results.

#9 Swaraj Engines

Swaraj Engines was incorporated in 1985 as a joint venture between erstwhile Punjab Tractors Limited (PTL) and Kirloskar Oil Engines (KOEL). However, as PTL was acquired by auto major M&M, SEL is now an associate company of M&M. It manufactures engines for its 'Swaraj' division of tractors.

The company manufactures diesel engines specifically for tractors in the range of 22 HP to above 65 HP and hi-tech engine components.

For financial year 2021-22, the company paid out a dividend of Rs 80 per share (800% on face value). This was the highest payout made by the company.

In the past decade, the company has grown its payout at an exponential rate. Take a look at the table below.

Swaraj Engines Dividend History

Year End	Dividend (%)	Dividend Yield %	Dividend per Share(Rs)	Dividend Payout Ratio (%)
31-Mar-2022	800.0	6.1	80.0	88.7
31-Mar-2021	690.0	5.3	69.0	90.5
31-Mar-2020	400.0	4.4	40.0	68.3
31-Mar-2019	500.0	3.6	50.0	73.6
31-Mar-2018	500.0	2.5	50.0	75.7
31-Mar-2017	430.0	2.9	43.0	77.6
31-Mar-2016	330.0	3.9	33.0	79.9
31-Mar-2015	330.0	4.1	33.0	79.1
31-Mar-2014	350.0	5.1	35.0	64.9
31-Mar-2013	330.0	8.4	33.0	74.0

Data Source: Ace Equity

Shares of Swaraj Engines have been in news recently after M&M said it will acquire an additional 17.4% stake from Kirloskar Industries. After this acquisition, Swaraj would become a subsidiary of M&M.

The company's management has been quite good at capital allocation and redistributing cash to the shareholders by means of regular dividends and buybacks.

With zero debt and sufficient cash on its books, Swaraj Engines could continue to pay higher dividend this year too.

#10 VST Industries

Last on our list is VST Industries, a leading cigarette manufacturer.

VST Industries got its name through its founder Vazir Sultan. At present, is the third-largest player in the Indian cigarette market with over 90 years of operations.

The company's principal activities are manufacture and sale of cigarettes and unmanufactured tobacco.

When you think of a tobacco stock which has consistently paid dividends and rewarded shareholders, ITC is the first choice, hands down. But VST Industries is also in this list and is often overlooked.

For the year ended March 2022, the company declared a dividend of Rs 140 per share. This is the highest dividend declared by the company.

VST Industries Dividend History

Year End	Dividend %	Dividend Yield %	Dividend per Share(Rs)	Dividend Payout Ratio (%)
31-Mar-2022	1,400.0	4.6	140.0	67.5
31-Mar-2021	1,140.0	3.4	114.0	56.6
31-Mar-2020	1,030.0	3.7	103.0	52.3
31-Mar-2019	950.0	2.7	95.0	64.7
31-Mar-2018	775.0	2.7	77.5	65.8
31-Mar-2017	750.0	2.6	75.0	76.4
31-Mar-2016	700.0	4.3	70.0	70.6
31-Mar-2015	700.0	4.4	70.0	71.0
31-Mar-2014	700.0	4.3	70.0	72.0
31-Mar-2013	625.0	4.2	62.5	76.5

Data Source: Ace Equity

While the company has good fundamentals to boast, it has underperformed due to ESG concerns.

To know more, check out the financial factsheet of VST Industries.

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