A fall in equity markets has seen the number of companies with high dividend yields of over 5 per cent increasing to over 400 from less 100 in January this year.
Around 1,038 companies have declared dividend in the last three years. Of these, 410 companies currently have dividend yields of over 5 per cent. The dividend yield is based on the current market price of stocks and the dividend paid by companies in the financial year 2007-08. The study reveals that high dividend-yield stocks are historically the best bet in a bear market.
Most of the mid- and small-cap companies have been offering high dividend yields. A total of 410 companies, which have dividend yields of more than 4 per cent, had paid total dividend of Rs 14,385 crore in FY08, accounting for 32 per cent of the total net profit of Rs 44,043 crore posted in the previous financial year.
Of the 410 companies, as many as 293 stocks have dividend yields over 5 per cent, of which 177 have dividend yields in the range of 5 per cent to 7 per cent. About 74 stocks have dividend yields between 7 per cent and 9 per cent and the remaining 42 stocks have dividend yields of more than 9 per cent each.
A total of 24 stocks from the frontline A group stocks, including Tata Motors, Tata Steel, Ambuja Cement, Tata Tea, Tata Chemicals, Shipping Corporation, Gujarat NRE Coke, HCL Technologies, MTNL and GE Shipping, are currently trading at a dividend yield of more than 5 per cent each.
HUL, Sesa Goa, JSW Steel, Canara Bank, Indian Overseas Bank, GAIL and LIC Housing Finance are trading at a dividend yield between 4 per cent and 5 per cent each on BSE.
