A weakness in the equity market provides an opportunity to lap up high-quality dividend-yield stocks. As long as the company pays dividends at the same rate, your dividend yield is fixed even if the market price of the stock changes subsequently. The dividend yield is one of the main factors to consider while investing in dividend-paying stocks. It is an indicator of the return that investors are earning on their shares.
In general, a robust dividend yield stock can provide you with a regular income. It helps you to treat a stock like a fixed deposit and you do not give much importance to the index levels. Brokerage Religare Broking filtered the list of top dividend-paying PSU companies based on their fundamental strength and selected the 10 stocks.
With a dividend yield of 11.2 per cent, the oil marketing company emerged as the first choice of Religare Broking among the top PSU majors. It was followed by the Steel Authority of India (SAIL), REC, NMDC, PTC India, National Aluminium Company (NALCO), Power Finance Corporation (PFC), Coal India, Oil & Natural Gas Corporation and Gail India. (See Table)
With a rally of 29 per cent, Power Finance Corporation has also delivered a robust return to investors in the ongoing financial year till February 28. During the same period, REC Ltd , Coal India Ltd and PTC India Ltd gained 24 per cent, 18 per cent and 6 per cent, respectively. The benchmark BSE Sensex added 1 per cent. On the other hand, shares of National Aluminium Company declined 36 per cent to Rs 78.25 on February 28, 2023, from Rs 121.75 on March 31, 2022. NMDC Ltd , Steel Authority of India Ltd, ONGC, Indian Oil Corporation and Gail (India) declined somewhere between 1 per cent and 32 per cent in the financial year 2022-23 till February 28.
Before investing in high-dividend stocks, your should zero in on the track record of the company in terms of dividend payment. An investor should also try to understand whether the company will be able to maintain the dividend in times of falling profit.
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