Indian markets are recording gains from November, with the Nifty 50 and Sensex touching their all-time highs. Despite that, this week, as the investors deposit their profits, the market remains bearish. Investors who are now looking to invest their money in the market as it has been at a record high should look for investing in dividend yield stocks. The quality dividend yield report for the last month of 2022 has been released by IDBI capital. According to the report, the five-year average return of the top ten yield stocks is far better than the return on equity of the FD schemes. The FD schemes provide an interest of three to ten percent depending upon the tenure of the deposit. Let us look at the top ten dividend yield stocks and their performance.
According to the report prepared and released by the IDBI, the highest dividend yield of 12.3% is provided by NMDC. The latest dividend payout of the NMDC was 46.06%. Dividend payout refers to the number of dividends paid to its shareholders, which is decided by the net income of the company in that fiscal year. The payment of the company determines the number of dividends.
In the fiscal year 2022, the latest dividend per share of the company would be around 14.7 rupees per equity share. The average return on equity (RoE) for five years is 19.73%.
REC is the second highest dividend yield-providing firm as it provides a dividend yield of 12%. REC is backed by the power ministry. The latest dividend payout of the REC was 30.11% and the latest dividend per equity for the fiscal year 2022 was around 13.3 rupees. The average return or the RoE provided by the company to its investors after five years is 17.48%.
3. GAIL (India)
GAIL (India) is a government-owned firm that has the third highest dividend yield stock of 10.7%. It is situated in New Delhi, and its latest dividend payout is 36.23%. The latest dividend per share provided by this firm is around 10 rupees per equity in the fiscal year 2022. The average return provided by this firm after five years is 13.31% which makes it one of the best platforms to invest your money.
4. Power Finance Corporation
PFC, or the power finance corporation, is the financial service provider of the Indian power sector. PFC provides a dividend yield of 10.1%. The dividend payout provided by power finance corporation for the fiscal year 2022 was around 22.61%. The dividend per share provided to the corporation’s shareholders was 14 rupees. The average return after five years of the investment supplied by the corporation is 25.67%.
HUDCO stands for the housing and urban development corporation. The main objective of HUDCO is to provide financial support to the housing projects and the infrastructural steps being taken in the country. It is a government-owned company. The company offers an excellent dividend yield of 9.3%. For the fiscal year 2022, HUDCO’s dividend payout stood at 40.82%. The dividend per equity for the shareholders was around 4.9 rupees per share. The average return provided by the company for the investment of each investor after five years is 12.26%.
6. Coal India
Coal India is the largest government-owned coal producer company in the world. Coal India provides a dividend yield of 9.1 percent. The latest dividend payout of the Coal India company for the fiscal year 2022 is 60.36 percent. The dividend provided to the investor per equity share is around 20.5 rupees for the investors. The coal producer gives a 48.81% return to its investors after the completion of five years.
7. Philips Carbon Black
Philips carbon black is the largest company in India that manufactures carbon black. The Philips carbon black company provides a dividend yield of 7.1 percent to its investors. The dividend per share provided by the company to its investors stood at around ten rupees per share. The average return supplied to every customer for their investment after five years is 19.36 percent. The fiscal year 2022 ended on March 30, 2022, and at this time, the company provided a dividend payout of 44.31 percent to its investors.
8. Power grid corporation of India
The power grid corporation transfers the electricity to different parts of India. It is a government-backed corporation, and it is involved in the transmission of bulk power across India. The corporation provides a dividend yield of around 6.7 percent to its investors. The latest dividend payout of the company for the fiscal year 2022 stood at about 61.16%, which is also the highest dividend payout provided by the top ten dividend yield stocks. The latest dividend per share provided by the company for the investment of its investors is 14.8 rupees per share, and the average return provided by the company after the completion of five years is around 22.99 percent.
9. Ircon International
Ircon International is an Indian railway-backed company with a dividend yield of around 6.7 percent for investments. The company provided a dividend payout of 39.69 percent to its investors for the fiscal year 2022. The dividend payout given to its investors for their investment was around 4.2 rupees per share. The average return provided by Ircon International to its investors after the completion of the five years is 10.61 percent.
MOIL stands for Manganese Ore (India) Limited. It is a Miniratna state-owned manganese ore mining company. MOIL provides a dividend yield of 6.5 percent to its investors. The dividend payout provided to its investors for the fiscal year 2022 was around 32.39 percent. The dividend per share given to the investors stood at 10.9 rupees per equity. The average return provided by the company to its investors after the completion of five years stands at 12.28 percent of the stock.
Some of the other dividend yield stocks present in the market are NTPC, Hindustan zinc, and Oracle financial services, all of these companies having a dividend yield of 5.9 percent; Rotes having a dividend yield of 5.4 percent; Polyplex Corporation having a dividend yield of 5.8 percent. Stocks like Swaraj engines have a dividend yield of 5 percent, Indus towers have a yield of 5.4 percent, and stocks like ITC and NHPC have a yield of 5.1 percent each.
The companies listed on the exchanges generally share their income in the fiscal year with the shareholders as an incentive. The dividends provided to the shareholders are a part of these incentives. The companies listed on the exchanges announce the percentage of dividends they will offer and then pay the dividends to the shareholders who are eligible for the dividends.
Dividends can be understood as the income on your investments which remain passive most of the time. So, the company which provides the highest dividends is considered safer than others. The dividend yield provided to the investor is the ratio of the dividend paid per share to the investors or the shareholders on the stock’s market price at that time. So, the dividend yields tend to change often according to the change in the market price of the stock. Stocks with a higher yield than the benchmarks, like the Nifty 50 or the Sensex, are considered high-yielding stocks in the market. The increased dividend yield stocks in the market signify that the stick is currently underpriced and has more potential in the future. In case of a slide down in the market, the dividend yield stocks can provide investors with higher yields. The dividend yield will tend to increase when the price of a stock decreases in the market, and similarly, if the cost of the stock keeps rising, the dividend yield will drop gradually.