Pick dividend growth over dividend yield: Aditya Birla Money

Shortlists six stocks which could yield 'low-risk reward' benefit.

Domestic brokerage Aditya Birla Money believes investors should opt for stocks with growing dividends to shield from the current market turbulence.

The brokerage has shortlisted six stocks with focus on dividend growth over dividend yield, which could yield “low-risk reward” benefit.

Oil India, Paper Products, Tata Investments, Cairn India, Bajaj Corp and Bajaj Auto, most of whom have dividend payout of more than 30% each, are the stocks that Aditya Birla Money recommended.  These stocks also have healthy dividend yield between 2.5% and 6.6%.

“Companies with growing dividends are generally growth companies which offer potential of capital appreciation in long term. This strategy is to be best adopted during uncertain times,” says the broking house.

“Pain may not be in the price yet and …it’s important to tread with caution. Recent sell off has improved dividend yields,” it further said.