High dividend yield stocks (from Indian stock market) – February,2013
High Dividend yield stocks are always a great choice for investors. High dividend yield stocks are not only offer you a steady cash flow but also protect your portfolio from market crash. Click here to know more about dividend yield and its significance from an investor’s point of view.
Following is a list of high dividend yield stocks as on 1st February,2013. Before that follow the methodology of preparing the list of high dividend yield stocks-
- Only traded stocks- Out of around 7000 listed stocks(from NSE and BSE), I have only considered actively traded stocks with more than 200 cr market capitalization.
- High Dividend yield with high return ratios- Then I have considered high dividend yield stocks whose dividend yield is greater than 4%. Not only that to be sure about Management effectiveness I have also considered Return on Equity (ROE), Return on Capital Employed(ROCE) and also Net profit Margin. Stocks with high ROE, high ROCE and high net profit margin are placed in the list of high dividend yield stocks.
- Growth Rate- Then I have removed those stocks which have negative growth rate for last 3years (CAGR). I have considered last 3 years CAGR profit growth and sales growth. Stocks with past 3 years CAGR (Compound annual growth rate) of at least 15% are placed in the list of high dividend yield stocks.
- Low Debt- Fundamentally strong companies must have very low debt to equity ratio to maintain a healthy balance sheet. I have also eliminated those companies with high debt to equity ratio to make sure that the growth is not fueled by debt.
- Market Price Performance- Fundamentals of a company reflects in its stock market price over long term. That’s why I am also considering the price performance of those stocks for last 3 years. I have eliminated stocks with negative price return over last 3 years. The reason is if you find high dividend yield stocks with high growth rate, high margins and also with high ROE and ROCE but the stock is delivering negative return over a long period then you can assume that something is wrong with that stock.
After applying those advanced filters the following stocks are obtained:-
List of High dividend yield stocks as on February,2013
|Company||Dividend Yield (%)||3 Yr CAGR Profit (%)||3 Yr CAGR Sales (%)||Return on Equity (%)||Return on Capital Employed (%)||Debt to Equity Ratio (x)||Net Profit Margin (%)|
|Balmer Lawrie Investment||5||16.54||17.19||49.47||52.17||0||93.52|
P.S-This is not a stock tips. Don’t invest in any of those stocks without adequate fundamental analysis. Those parameters should not be considered in isolation. Judge all other fundamental parameters before investing. I have just sorted out those stocks from the universe of around 7000 stocks using above mentioned method. However if you have any queries about any stocks or any of your investment concern, just feel free to write here. I will be happy to help you.You can also click here to get few free stock tips.
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