High Dividend Yield Stocks

In this blog, we will look at top 10 High Dividend Yield Stocks. Investors gain profit by stock price appreciation and payouts made by the company at regular intervals.

What are Dividend Play Stocks

Dividend-paying stocks allow investors to profit in two ways:

Stock price appreciation
Payouts made by the company at regular intervals.

Dividend-paying companies also have substantial amounts of cash, and therefore, are usually strong companies with good prospects for long-term performance.

A company’s dividend policy is often seen as a testament to its confidence in future earnings growth and sustainability of the business.

In other words, a good track record of dividend payments is a strong sign of reliability and an indication that the stock would give good returns in future.

Criteria:

Low Debt to Equity – The companies with a low debt/equity ratio between 0 and 1 which is generally healthy.

Dividend Yield – The companies with high Dividend Yield of 4%+.

Zero Pledged Shares – The companies with literally zero percentage of Promoter’s pledged shares.

5Y Avg. EBITDA Margin – The companies with more than 12% of 5Y Avg. EBITDA Margin.

List of Top 10 High Dividend Yield Stocks:

Coal India Ltd – CIL is at the forefront of the nation’s coal production where it alone produces around 83% of country’s entire coal output. The company’s dividend yield is 10.34% which is more than a FD interest rate.

Polyplex Corp. Ltd – The Company is the Industry leader with near 100% Capacity Utilization through business cycles. Globally one of the lowest cost manufacturers, driven by scale economies, operational excellence, vertical integration and strategic manufacturing locations. The dividend yield of the company is more than a FD interest rate.

NMDC Ltd – NMDC is the largest iron ore manufacturer in India accounting for 18% of the total domestic production. The average annual production of the company stood at 17 million MT for the past 5 years. Despite its high capex requirement, the company is paying healthy dividends through high free cash balance.

Petronet LNG Ltd – Petronet LNG is India’s leading play in import of LNG in the country and will be a beneficiary of the government’s aim to increase the share of natural gas in the energy basket to 15% over the long term. It has delivered 28% dividend growth per year on avg. over the past 10 years.

ITC Ltd – The company has an 77% market share in volume terms in the organized cigarette sector, which is a borderline monopoly. ITC has changed its dividend payout ratio to 80-85% vs. 67% earlier, highlighting the commitment towards shareholder wealth creation.

Rites Ltd. – RITES (Rail India Technical and Economic Services) Ltd. is a railway PSU operating since the last 44 years. The stock is providing a good Div. Yield of 4.72% backed by the consistent maintenance of Cash balance. The cash and cash equiv. as of FY21 stands at Rs.3652crs. (50% of Market Cap.)

Sanofi Ltd – Sanofi offers drugs in therapies like diabetes (insulins & orals), cardiology, thrombosis, anti-infective, CNS, allergy, vitamins, minerals & supplements. Strong balance sheet, good dividend payout track record and comfort on corporate governance are the performance triggers.

Ambuja Cement Ltd – ACL is a leading player in the Indian building materials space with an estimated market share of 8% in the Indian cement market in 2020. The retail segment contributes 81% of the company’s total sales which is catered through its strong network of 55,000 channel partners spread across India. Ambuja Cements has the highest Dividend Yield among its peers.

OFSS Ltd. – Oracle Financial Services Software Ltd provides financial software, custom application development, consulting, IT infrastructure management, and outsourced business processing services to the financial services industry. High cash balance and debt free status results in a strong balance sheet.

Castrol India Ltd – The dominance of Castrol in the Indian lubricant market has ensured a low capital requirement for additional expansion. This enables the management of Castrol to return most of the profits back to the shareholders. The dividend payout for Castrol for CY20 stood at 93%.