10 stocks with high dividend yield even in this market

The dividend yield for stocks including IL&FS Investment, NHPC and Coal India is around 7%

With benchmark Sensex gaining 10 per cent and the broad-market BSE 500 index rally 15 per cent so far this year, investors are complaining about lack of good investment opportunities. The valuations for high growth stocks have turned lofty, while a bubble seems to be building in many mid-cap and small-cap segments. 

Given this scenario, conservative investors can look at stocks that offer high dividends. If markets go into correction mode, experts say, high dividend yield stocks can help minimise losses. The dividend yield for stocks including IL&FS Investment, NHPC and Coal India is around seven per cent —higher than bank fixed deposit rates — even at current market rates. 

Dividend yield is the dividend per share paid by a company during a financial year as a percentage of share price. To illustrate, an investor who bought shares worth Rs 100 of NHPC a year ago, earned Rs  7.2 just in the form of dividends. 

In addition, the investor also made capital gains of 37.1 per cent. Although capital gain is a variable factor, dividend can be a stable form of income in companies with a track record of high payouts. Most of the top dividend-paying companies are public sector undertakings (PSUs). 

Experts say the higher dividend in these PSUs have come on the back of increase payouts not necessarily backed by earnings growth. Whether or not these companies continue to pay high dividends will depend on how their earnings pan out this year.