Is This The Right Time To Buy High Dividend Yield Stock?

Vidrum / 28 Feb 2012

We at DSIJ calculated the dividend yield ratio of BSE 500 stocks to check which stocks at the moment are looking good as an investment opportunity.
With the fiscal year coming to an end one usually calculates the total income for the year and accordingly makes arrangements for tax deductions and payments. Various investment schemes which provide tax deductions therefore become popular at this time of the year. One should note that dividend received from the stocks i.e. from the equity market is also exempted from income-tax. Hence, with the fiscal near to its closing most of the companies usually declare dividend during this point of time.
 
We at DSIJ calculated the dividend yield ratio of BSE 500 stocks to check which stocks at the moment are looking good as an investment opportunity. We ignored some of the public sector banks as even though they may declare good dividends they are in urgent need of capital. We took last year’s dividend declaration of the companies. Further, we filtered those companies which performed well during the first nine months of FY12. With this we got the following 15 companies which we feel will declare good dividend in the coming months and which would create decent wealth for the investors.

Sr No

Company

Current Share Price

Dividend Per Share Rs (FY11)

Dividend Yield Ratio

% Growth In 9M Sales Of FY12

% Growth In 9M Profit Of FY12


01

Titan Industries

216.8

25

11.53

38.25

31.50


02

Bajaj Corp

115.1

9.5

8.25

30.92

50.88


03

ONGC

281.05

16.75

5.96

9.02

20.73


04

Hero Motocorp

1931.9

105

5.44

25.22

24.40


05

Indiabulls Financial Services

193.75

10

5.16

56.32

36.77


06

Balmer Lawrie & Co

542.5

26

4.79

11.48

17.98


07

SJVN Ltd

19.1

0.8

4.19

6.71

18.35


08

Gujarat Narmada Valley Fertilisers

84.4

3.25

3.85

35.15

61.24


09

Rolta India

90.1

3.5

3.88

18.66

68.28


10

VST Industries

1,279.9

45

3.52

13.95

54.41


11

Tata Elxsi

204.4

7

3.42

34.47

23.81


12

HDFC bank

515.6

16.5

3.20

37.61

32.09


13

Deepak Fertilizer

155.95

5

3.21

45.42

25.56


14

Oil India

1,242.8

37.5

3.02

27.62

29.12


15

Eclerx Services

758.9

22.5

2.96

40.24

38.71



One should also note that past declaration of dividend may not continue in future. Also, some of the companies might have declared dividend during the current fiscal (i.e. interim dividend).

We at DSIJ believe that investors usually skip the dividend returns while calculating the net return on investment. Also, with dividend being exempt from tax would give an additional return to the investors. 

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