When analyzing India’s highest and Best dividend stocks to buy India in 2022, one of the most critical factors to evaluate is a company’s ability to continue paying dividends. While variables like payout ratio (Payout ratio = Dividends per Share (DPS) / Earnings per share)and financial soundness can help evaluate dividend safety, the board of directors ultimately decides on dividend payments. That is why you should think about a company’s dividend payment promise over time to enjoy the best-cum-highest dividend stocks of India in 2022.
A dividend is a payment made by a corporation to its shareholders. Most businesses set aside a percentage or profit pie of their income for dividends and keep the remainder for reinvestment. The dividend yield measures how much an investor earns in total dividends (per share) from their investment. It’s computed by multiplying the dividend announced by 100 and dividing by the share price. For example, if a business ‘X’ has a share price of Rs 100 and pays a Rs 1 dividend, the dividend yield is 1%.
The distinction between dividend and growth stocks comes from management actions. When a company produces a profit, it has two options: distribute the money to investors in a dividend, or invest it back into the Company.
Dividends are not paid by companies that believe they would get a better return by investing in the Company than they would have gotten from other assets. On the other hand, dividend paying companies are mature and stable, and they consider that future growth is limited, so they prefer to pay their shareholders and look for better investment options.
Read Also: Best ETF Funds to Invest in 2022 India.
1) Less risk
Even if there is a rapid market crash or a drop in the value of a specific event, high-dividend stocks retain their value. As a result, compared to other growth equities, they are almost risk-free or limited risk. The most excellent thing about dividend stocks is that they regain their value during market downturns, making them a safe bet for capital preservation for risky investors. When these equities are included in a portfolio, they help to adequately diversify the risk potential.
2) Passive income
Yes, you can earn while sleeping or having a holiday with the highest dividend paying stocks in India.
Companies routinely offer high dividend stocks and distribute their profits to all shareholders regularly. This provides individuals with a consistent source of income compared to the interest they would receive if they saved money for a longer time. Dividend stocks, like govt bonds, provide low-risk returns on investments to ensure that money is put to good use.
3) Inflation hedge tool
In this challenging year, almost all significant economies are about to suffer inflation; some of them are likely to touch hyperinflation! While the rate of inflation continues to spike on a daily basis, making effective and inflation-proof investments is critical. A dividend stock, particularly one with a strong dividend growth rate, can help an investor achieve this. Dividend yields that are increasing and assist you in combating and voiding rising inflation rates.
To choose the highest dividend paying stocks in India, we should ensure the payout ratio is a minimum of 40%, and the dividend yield should be more than 3%.
They declared a 200.00% equity dividend amounting to ₹ 2 per share for the fiscal year ending March 2022. This comes in a dividend yield of 6.71% at the current share price of ₹ 29.80. The Company has a PE ratio of 11.96 with a market capital of ₹ 391.17 cr. It has a good track record of 35.3% returns in 5 yr.
The healthy dividend payout ratio for NHPC over the last five years has been 49.3%. The Government of India owns NHPC, India’s largest hydroelectricity developer with a capacity of 7,071 megawatts (on a consolidated basis). Market capital is ₹ 32,696 cr, and as of Feb 2022, the interim dividend was 13.1%. This year NHPC paid ₹ 933 cr as an interim dividend to govt.
PTC India is a govt firm specializing in power trading, cross-border power trading, and consulting services. In FY 21, Company reported ₹ 18,373 cr, and PAT growth was 22% at ₹448 cr. It has a market cap of ₹2,538 cr and EPS of 15.97. Last 3-year Company returned 17.54%, and the annual dividend yield is 8.77%, with ROE of 11.37%.
PNB Gilts Ltd
Instead of selling the Company, Punjab National Bank (PNB) chose in February 2009 to merge it with its principal dealership subsidiary, PNB Gilts. So now, the parent company is Punjab National Bank. The Company has a good track record of 91% returns in 3 years and 33% returns in 5 years. The dividend yield is 7.64%, with EPS of ₹9.21 and a market capitalization of ₹1,178 cr. In the last quarter, operating income was ₹241.91 and profit before tax ₹59 cr. EPS growth scale-up 143%.
Oil India Ltd
Today, OIL is a leading Indian national oil company specializing in crude oil and natural gas exploration and production, as well as crude oil transportation and LPG production. OIL India also offers a variety of services connected to exploration and production.
The company has ₹23,640 cr market capital and a good track record of 63.6% return in one year and 17.71% in three years. PE ratio is 5.31, and ROE is hopeful at 6.88%. However, its dividend is Rs 5, and the yield is 2.23 %.
The Imperial (Indian) Tobacco Company of India Limited was established on August 24, 1910. ITC is active in a number of industries, including FMCG, Hotels, Packaging, Paperboards & Specialty Papers, and Agribusiness.
This year, the company provides a dividend of ₹10.75 with consolidated Q4 jumps to 12%, which is ₹4,195 cr. This virtual debt-free company has been maintaining healthy ROE of 23.71% over the past three years. It has a vast market capital of ₹ 3,31,742 cr with a PE ratio of 22.
Granules India Limited produces APIs, Pharmaceutical Formulation Intermediates (PFIs), and Finished Dosage (FD). Paracetamol, Ibuprofen, Metformin, Methocarbamol, and Guaifenesin are just a few of the ‘first line of defense’ medications that the company has developed over the years.
As of the Q1 result of March 2022, For the quarter ending March 2022, revenue increased 16.80% to ₹ 9128.48 million, compared to ₹ 7815.51 million in the same period last year. The company has a market cap of ₹6686 cr and an EPS of ₹16.64. It performed 140% returns in 3 yr, and 97% returns in 3 yr and dividend payout ratio hits 6.01%.
Greaves is a market leader in fuel-agnostic solutions, producing Cleantech powertrains for the CNG, gasoline, and diesel industries. Non-Automotive, Aftermarket, Automotive, Greaves Retail, and Electric Mobility are all segments in which the firm operates.
The company has ₹3,489 cr market capital with a year return of 17.31%. For FY22, Greaves Cotton claimed a 129% increase in retail sales of its E-Mobility division. In this Q1 net sales jumped ₹378 cr, and PBT gained ₹25 cr. In March 2022, the company declared an equity dividend of 10%.
If money is not a significant problem or you want a more passive income from dividends, then think TCS, Oracle Financial, Sanofi India, Hero Motocorp, Mphasis Ltd, and L&T.
Investing in dividend stocks benefits a variety of people. Dividend stocks can provide decent long-term returns for investors, whether they are adventurous or conservative.
Before investing in high-dividend stocks, it’s usually good to do your own research. This will assist them in ensuring that their investment capital is in the appropriate place and that they will receive consistent returns.
Dividends are payments provided by a corporation to its shareholders to share its profits. There are mainly four types of dividend Cash dividend, Stock dividend, Hybrid dividend, and Property dividend.
The dividend from an Indian corporation was tax-free until March 31, 2020. (FY 2019-20). This was due to the fact that the corporation announcing the dividend had already paid the dividend distribution tax (DDT) before payment. The Finance Act of 2020, on the other hand, modified the way dividends are taxed. All dividends received on or after April 1, 2020 will be taxable in the investor’s/hands.
This entire article is the answer with a market analysis financial health of the stocks.
YES, dividend stocks allow investors to reap the benefits of both price appreciation and dependable recurring income.
ould buy the stock before the ex-dividend date or hold the share before the record date. Try to at least complete two days.
You should buy the stock before the ex-dividend date or hold the share before the record date. Try to at least complete two days.
Most companies pay dividends every quarter (which means four times a year)
No! Tesla does not pay dividends.
BitMAX is an exchange that pays dividends to the holders of its BTMX tokens.
Watch Latest Web Stories
All the information are used for education purpose only. Investing in stocks poses a risk of financial losses. Investors must therefore exercise due caution. InvestoAxis is not liable or responsible for any losses caused as a result of decisions based on the article.