The dividend yield of a share is the ratio of dividends paid per equity share to shareholders on the current price of the equity share. Stocks with high dividend yield compared to benchmarks like Sensex and Nifty 50 are referred to as high dividend yield stocks. The high dividend yield also gives a fair understanding of the share’s price value. Simply put, high dividend yield stock hints that the stock is typically under-priced by the market and has more potential ahead.
Motilal Oswal in its latest report has announced high dividend yield stocks for the financial year FY22.
The top 10 dividend yield stocks have given better returns to investors than compared to traditional investment schemes.
Top 10 dividend yield stocks
Vedanta
Data from Motilal Oswal showed that Vedanta’s dividend payment to shareholders has increased over the past three fiscal years. The company had given a dividend of ₹3.9 per share in FY20, which increased to ₹9.5 per share in FY21, and further to a whopping ₹45 per share in FY22.
During FY22, the Mumbai-based multinational mining company’s dividend yield is 17.1% highest in Motilal’s tracker.
On BSE, Vedanta shares are around ₹263.85 apiece up by 1.34%. The company’s market cap is around ₹98,078.23 crore.
NMDC
Government-owned mineral producer, NMDC’s dividend yield is around 12.1% by FY22. The company had given a dividend of ₹14.7 per share in FY22 to its shareholders compared to ₹7.8 per share dividend in FY21 and a ₹5.3 per share dividend in FY20.
On Tuesday, NMDC shares closed at ₹122 apiece slightly down compared to the previous closing on BSE.
The company has a market cap of ₹35,753.39 crore.
Indian Oil Corp
The oil marketing company’s dividend yield is about 11.8% by end of FY22. A dividend of ₹8.4 per share was paid in FY22 compared to ₹8 per share in FY21 and ₹2.8 per share in FY20.
On BSE, Indian Oil shares are at ₹70.75 apiece marginally down from the previous closing. The company’s market cap was slightly shy of ₹1 lakh crore and stood at ₹99,907.76 crore by end of Tuesday’s trading session.
INEOS Styrolution
The specialty chemicals company has a dividend yield of 11.4% by FY22. The small-cap stock paid a massive dividend of ₹105 per share during FY22 — more than ten folds higher than compared ₹10 per share in FY21.
On BSE, the company’s shares are at ₹897.65 apiece lower by 0.56%. The company’s market cap is around ₹1,578.57 crore.
SAIL
The government-owned steel company has a dividend yield of 10.8% in FY22. Its dividend stood at ₹8.8 per share in FY22 compared to ₹2.8 per share in the previous fiscal.
On BSE, SAIL shares are around ₹81.95 apiece up by 1.80%. The company’s market cap is ₹33,846.11 crore.
Power Finance Corporation
PFC, India’s largest infrastructure finance company, has a dividend yield of 10.2% in FY22. The company paid a dividend of ₹12 per share in FY22 compared to ₹10 per share in FY21 and ₹9.5 per share in FY20.
The NBFC settled at ₹116.55 apiece up by 1.83% on BSE during Tuesday’s trading session. It has a market cap of ₹30,770.16 crore.
REC Limited
PFC-backed financial services provider in the power sector, REC has a dividend yield of 9.3% in FY22. The company paid ₹10 per equity share in fiscal 2021-22 — however, lower from ₹11 per share in FY20 — but higher from ₹8.3 per share in FY20.
REC shares closed at ₹107.90 apiece up by 1.55% on BSE. The company’s market cap is ₹28,412.49 crore currently.
HUDCO
Government-owned HUDCO, which provides services in housing finance and plays role in urban infrastructure development, has a dividend yield of 8.5% by end of FY22. The company’s dividend stood at ₹3.5 per share in FY22 — higher than ₹2.2 per share dividend in FY21 — but lower than the ₹3.1 per share dividend in FY20.
HUDCO shares ended at ₹41.70 apiece down by 0.83% on BSE. The company’s market cap is around ₹8,347.92 crore.
National Aluminium (NALCO)
With diversified operations in the mining, metal, and power sector, NALCO is a government-owned firm, that has a dividend yield of 8.4% by end of FY22. The company’s dividend is at ₹6.5 per share in FY22 — rising from ₹3.5 per share in FY21 and ₹1.5 per share in FY20.
NALCO shares finished at ₹80.35 apiece up by 1.26% on Tuesday. The company’s market cap is around ₹14,757.34 crore.
Hinduja Global Solutions
IT service management company, HGS has a dividend yield of 8.3% in FY22. The company’s dividend was 9.5 times higher at a whopping ₹124 per share in FY22 compared to mere ₹13 per share in FY21. In a financial year, FY20, the dividend stood at ₹11.8 per share.
On BSE, HGS shares closed at ₹1409.40 apiece up by 0.83%. The company’s market cap is around ₹5,890.61 crore.
These 10 dividend yield stocks have outrun bank fixed deposits which range from 2.9% to a little over 7%. Notably, the interest rates on FDs vary from bank to bank.
Also, these 10 stocks have beaten small saving schemes like Public Provident Fund Account (PPF) and National Savings Certificates (NSC) which offers 7.1% and 6.8% interest rate currently.
Other dividend yield stocks
Apart from the top 10, in FY22, Banco Products has a dividend yield of 7.9% and ONGC with a yield of 7.8%. Companies like Oil India, Hindustan Zinc, and Coal India have a dividend yield of 7.4% each. While Nirlon has a dividend yield of 6.7%, followed by Savita Oil and IRFC with a yield of 6.5% each.
Further, Geojit Financial Services and Rites company have a dividend yield of 6.3% each in FY22, whereas, Oracle Financial Services has a yield of 6.1%. The oil company, HPCL has a dividend yield of 5.7%, while CESC, DB Corp, and Rail Vikas have a dividend yield of 5.6% each by end of FY22.
These dividend yields are as of September 1, 2022, excluding special dividends. The companies hold a market cap above ₹1,000 crore.
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