Dividend Yield Stocks – Many Companies offer share price appreciation as a reward for their investors. Such returns, on the other hand, are not constant and fluctuate. Do you know that there are some firms that offer high dividends with yields ranging from 6% to 10%? In other words, if you invest Rs 5 lakhs, you could gain up to Rs 50,000 in dividends per year in addition to share price appreciation. In India, what are the Top 10 Dividend Yield Stocks to Invest in in 2022? Is it safe to put money into these high-yielding stocks?
Companies would distribute profits to their shareholders in the form of dividends. While such payouts are not guaranteed, they provide as an additional source of income for investors. In some circumstances, firms pay dividends even if they do not make a profit that year.
The face value of the share price is used to calculate dividend payout. The face value of Company X Limited shares, for example, is Rs 10. It has declared a Rs 5 per share dividend. In this scenario, the dividend payout ratio is = 5/10 = 50%. However, this would not reflect the genuine picture of actual investment returns. The dividend yield has arrived.
Dividend yield is calculated by comparing the amount of dividends paid to the current share price of the company.
10 Dividend Yield Stocks to invest in 2022 in India
Here is the list of the Top 10 stocks which are paying highest dividends in India.
#1 – Hinduja Global – 10.1%
#2 – REC Limited – 9.7%
#3 – IOCL – 9.3%
#4 – Power Finance Corp – 9%
#5 – NMDC – 8.8%
#6 – Coal India – 8.6%
#7 – Allsec Tech – 8.5%
#8 – PTC India – 7.9%
#9 – SAIL – 6.1%
#10 – Hudco – 6%
Best Dividend Yield Stocks for 2022
1- Hinduja Global –
Hinduja Global Solutions Limited is a company that specialises in the management of business processes. It provides voice and non-voice based services around the world, including contact centre solutions and back office transaction processing.
Last year’s dividend yield was 10.1 percent.
Dividend distribution on FV of shares is 25% (FY21), 21% (FY20), and 12% (FY19) (FY19).
The performance of the stock price over the last year has been 27 percent, and over the last three years, it has been 238 percent.
It recently sold its healthcare services business to BPEA for US$ 1.2 billion (roughly INR 8,940 crore).
2- REC Limited –
REC Limited is a Ministry of Power-owned Central Public Sector Undertaking that finances projects across the whole power sector value chain, from generation to distribution.
Last year’s dividend yield was 9.74 percent.
Dividend distribution on FV of shares is 30% (FY21), 44% (FY20), and 38% (FY18) (FY19).
Performance of the stock price over the last year has been 1%, and over the last three years, it has been negative 15%.
3- IOCL Limited –
Indian Oil Corporation Limited (IOCL) is a Maharatna company controlled by the government of India with business interests spanning the entire hydrocarbon value chain, from refining, pipeline transportation, and marketing of petroleum products to research and development, exploration and production, and marketing of natural gas and petrochemicals. It is the market leader in India’s oil refining and petroleum marketing sectors.
The dividend yield for the previous year was 9.3 percent.
The dividend distribution on FV of shares is 51% (FY21), 0% (FY20), and 49% (FY19) (FY19).
1 year price performance was 44 percent, while 3 year price performance was minus 17 percent.
4- Power Finance Corporation-
Power Finance Corporation Limited is a Systemically Important Non-Deposit Taking NBFC that is registered as an Infrastructure Finance Company with the Reserve Bank of India. It is involved in providing financial aid to India’s power sector.
The dividend yield for the previous year was 9%.
Dividend payouts on FV of shares are 22% (FY21), 35% (FY20), and 0% (FY19) (FY19).
Share Price Performance: 7.5 percent in one year and negative 2% in three years.
NMDC is involved in the discovery and production of iron ore and diamonds, as well as the manufacture and sale of sponge iron and the generation and sale of wind energy.
The dividend yield for the previous year was 8.8%.
Dividends are paid out at a rate of 36 percent (FY21), 45 percent (FY20), and 37 percent (FY17) (FY19).
Share Price Performance – 1 Year – 21%, 3 Years – 61%
6- Coal India Limited –
Coal India Limited is primarily involved in coal mining and production, as well as running coal washeries. The power and steel industries are the company’s main customers. Other industries’ customers include cement, fertilisers, and brick kilns, among others.
Last year’s dividend yield was 8.6 percent.
The dividend payout on the FV of a share is 78 percent in FY21, 44 percent in FY20, and 46 percent in FY21 (FY19).
Share price performance over the last year has been 46 percent, and over the last three years, it has been minus 22 percent.
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7- All Sec Tech Limited
Allsec Tech Limited is a global pioneer in outsourcing solutions, providing industry giants, Fortune 100 businesses, and growth-focused enterprises with future-ready, resilient business transformation services. Data verification, processing of orders received via telephone calls, telemarketing, monitoring the quality of calls made by other call centres, customer service, and HR and payroll processing are among the services provided by the company. The company has delivery hubs in Chennai, Bengaluru, and the National Capital Region (NCR).
Last year’s dividend yield was 8.5 percent.
The dividend on the FV of a share is 65 percent in FY21, 0 percent in FY20, and 97 percent in FY21 (FY19).
Share price performance over the last year has been 63 percent, and over the last three years, it has been 79 percent.
8- PTC India Limited
PTC India Limited is a power trading company that was founded by the Indian government in 1999 as a Public-Private Initiative. Power Grid Corporation of India Limited (PGCIL), NTPC Limited (NTPC), Power Finance Corporation Limited (PFC), and NHPC Limited are the companies behind it (NHPC).
The yield on last year’s dividends was 7.9%.
Dividends are paid out at a rate of 49 percent (FY21), 44 percent (FY20), and 28 percent (FY19) (FY19).
Performance of the stock price over the last year has been 12 percent, and over the last three years, it has been 30 percent.
9- SAIL –
Steel Authority of India Limited (SAIL) is one of India’s leading steel producers and one of the country’s Maharatnas of Central Public Sector Enterprises. SAIL manufactures iron and steel at five integrated plants and three special steel factories primarily in India’s eastern and central regions, near to local raw material sources. SAIL produces and distributes a wide variety of steel products.
Last year’s dividend yield was 6.1 percent.
The dividend distribution on FV of shares is 28% (FY21), 0% (FY20), and 9% (FY19) (FY19).
Performance of the stock price over the last year has been 17 percent, and over the last three years, it has been 87 percent.
Housing & Urban Development Corporation Ltd’s main business is to finance housing and urban development projects in the country.
The yield on previous year’s dividends was 6%.
Dividend distribution on FV of shares is 28% (FY21), 36% (FY20), and 14% (FY14) (FY19).
Share Price Performance – minus 14 percent in one year and minus 18 percent in three years.
Before investing in these high dividend yield stocks, bear the following points in mind.
1) While these corporations pay regular dividends, they are not guaranteed.
2) The majority of these businesses are government-owned. The major goal for them is to generate some revenue for the Indian government. The dividend income may be reduced if these are privatised. However, there is a larger possibility that share values will rise if the company is privatised.
3) These companies’ stock prices have had a poor performance. Many of these firms’ stock values have dropped in the recent one to three years. Invest in consistent performers in these two categories if you want big dividends and a rise in share prices.
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