BackFive consistent dividend paying midcap stocks to add to your watchlist
Looking for consistent passive income? Hit the bull’s eye with these 5 midcap dividend paymasters.
PremiumA tussle between bears and bulls in the stock market has made investors gobble up dividend paying stocks in India. These income-generating dividend stocks are seen as a safe harbor.
This shift towards dividend stocks has made them more alluring than they have been in a long time.
In this rush for cash, a lot of investors gravitate toward more defensive investments. Like how investors opt for the best FMCG stocks during turbulent times. It has led to a boost in demand for stocks with high but consistent payouts.
The consistent payout of dividends reduces the uncertainty of return, which makes thempotential wealth compounders.
Recently, we wrote to you about the consistent dividend paying smallcap stocks in India. In today’s article, we want to focus on midcaps.
Midcap stocks usually have a higher growth potential to generate consistent cash flows.
Keeping that in mind, here are the top 5 midcap stocks with consistent and growing dividends.
#1 Relaxo Footwear
Relaxo Footwear is India's largest manufacturer of footwear products.
It manufactures a wide range of products under several brands such asFlite, Sparx, Bahamas, etc. Having a pan India distribution footprint, it operates a strong network of more than 350 retail outlets.
Since 2000, the company has rewarded shareholders, 25 times with dividends. The five-year average dividend payout ratio is 17.1%.
For the year ending March 2022, it declared an equity dividend of 250%, amounting toRs 2.5 per share.
Relaxo Footwear’s dividend payout has grown at a CAGR of 20.5% over the last five years.
#2 Honeywell Automation India
Honeywell Automation India is a market leader in electronic instrumentation and process control equipment. It is the leading provider of integrated automation and software solutions.
The company has a wide product portfolio including, environmental and combustion controls. It provides engineering services in the field of automation.
Since 2001, the company have declared 22 dividends. The five-year average dividend payout ratio is 15.1%.
For the financial year 2022, it has declared an equity dividend of 900%, amounting toRs 90 per share.
Honeywell Automation India’s dividend payout has grown at a CAGR of 16.9% over the last five years.
#3 Astral
Astral is an engineering sector company. It manufactures pipes and fittings for plumbing, sewerage, fire sprinklers, and ducting. The company has also ventured into the adhesives business. Its products in this segment include solvent cement, putty, and tapes.
It has 12 manufacturing facilities in India and abroad. The total manufacturing capacity is 247 thousand tons for pipes and 87 thousand tons for adhesives.
The company has declared 28 dividends since 2008. The five-year average dividend payout ratio is 7.2%.
For 2022, it has declared an equity dividend of 300%, amounting toRs 3 per share. Astral’s dividend payout has grown at a CAGR of 27.1% over the last five years.
#4 IPCA Laboratories
IPCA Laboratories is one of the oldest pharmaceutical companies in 120 countries.
It manufactures over 350 formulations and 80 APIs (Active Pharmaceutical Ingredients) for various therapeutic segments. These segments include cardiovascular, anti-diabetic, pain management, and many more.
The company has 15 APIs and 11 formulation manufacturing facilities across the globe, with a manufacturing leadership of 12 APIs. Since 2000, the company have declared 37 dividends.
The five-year average dividend payout ratio is 5.5%.
For the financial year 2022, it has declared an equity dividend of 400%, amounting toRs 4 per share. Honeywell Automation India’s dividend payout has grown at a CAGR of 44.6% over the last five years.
#5MRF
MRF is the largest tyre manufacturer in India. The company manufactures a variety of rubber products. It includes tyres, tubes, conveyor belts, and toys.
The company has declared 70 dividends since 2000.The five-year average dividend payout ratio of the company is 2.5%.
The company, in February 2022, paid an interim dividend of 30%, which was ₹3 per share. It has further declared a final dividend of ₹144 per share.
Over the last five years, MRF’s dividend payout has grown at a CAGR of 46.6%.
Why you should invest in dividend growth stocks
Fundamentally strong companies usually pay dividends at a growing rate. This increases the amount of passive income every year. Further, dividend-paying stocks help by acting as a hedge against inflation and market volatility.
In 2022, markets have experienced turmoil due to inflation and rising interest rates. Dividend-paying stocks are a good place to hedge against this volatility.
Before investing in dividend growth stocks, you should investigate the company's history of dividend payments. Check how the company will continue its dividend rewarding journey in the future too.
If you want to dwell deeper on the topic of dividend investing, use Equitymaster's powerful stock screener to check high dividend yield stocks and dividend growth stocks in India.
Happy investing!
Disclaimer:This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
(This article is syndicated from Equitymaster.com)
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