REC and 5 other stocks that pay dividends higher than bank FD rates
Annual dividend yield of IOCL currently stands at whopping 16.75%, which is more than long term equity mutual fund return that an investor expects
PremiumDividend paying stock becomes an attraction for shareholders during result season as it is an additional income that a long term investor enjoys over the short term investors or traders. It keeps a shareholder to stick with its conviction even when the the market is under bears' grip. Recently, REC Ltd has announced ₹5 per equity interim dividend to its shareholders for the financial year 2022-23. As REC shares are quoting at around ₹96.50 apiece today. Its dividend yield is more than 5 per cent, an average bank fixed deposit yield in small time horizon or say one year. In fact, if we go at the annual dividend yield of REC Ltd, then we would find that the Navratna NBFC has given total dividend of ₹13.30 per equity share in FY22, which is much higher than average bank fixed deposit interest rate of near 6 per cent.
Here we list out 5 shares of the Indian stock market whose annual dividend yield is much higher than bank fixed deposit interest rate or bank FD rates:
1] SAIL or Steel Authority of India Ltd: This metal PSU has given total dividend of ₹8.75 per equity share in FY22. SAIL has given dividend in FY22 on three occasions paying interim dividends of ₹4 per share in November 2021 and ₹2.50 in March 2022. The Navratna company has given final dividend of ₹2.25 per equity share. SAIL share price today is around ₹82 that means current dividend yield of the metal PSU is around 10.70, which is much higher than long term debt mutual fund return.
2] Power Finance Corporation Ltd or PFC: PFC shares are current quoting near 22 per cent below its 52-week high of ₹142.30 apiece levels. The PSU stock has given a dividend of ₹12.25 per equity share in the financial year 2021-22. It paid dividend to its shareholders on four occasions. It gave interim dividend of ₹2.50, ₹2.50 and ₹6.0 per equity share in August 2021, November 2021 and February 2022 respectively. It announced ₹1.25 final dividend for FY22 as well. As PFC share price today is around ₹110 apiece, its current annual dividend yield for FY22 stands at more than 11 per cent.
3] PTC India: This is another state-owned company that has given dividend of ₹7.50 per equity share during FY22. It gave interim dividend of ₹2 per equity share and a final dividend of ₹5.50 per equity share. As PTC India shares are available at ₹71.25, current annual dividend yield of this sate-owned company is around 10.50 per cent, much higher than average bank fixed deposit interest rate.
4] Coal India Ltd: This state-owned company delivered dividend to the tune of ₹17 per equity share to its shareholders in FY22. It gave two interim dividend of ₹9 and ₹5 per equity share to its eligible shareholders in December 2021 and February 2022. Later on, it announced final dividend of ₹3 per equity share in August 2022. Coal India Ltd share price today is around ₹240 that means its current annual dividend yield is more than 7 per cent and it has managed to beat bank FD return with a handsome margin.
5] Indian Oil Corporation Ltd or IOCL: This Navratna company has given whopping dividend of ₹11.40 per equity share in the financial year 2021-22. The state-owned Navratna company gave two interim dividend of ₹5 per share and ₹4 per share in November 2011 and February 2022 respectively. It gave final dividend of ₹2.40 in FY22 as well. IOCL share price today is around ₹68 that means annual dividend yield for FY22 of IOCL is around 16.75 per cent.
However, stock investors are advised to understand that dividend payment of a company is completely a management decision and pattern for giving dividend or bonus may change with the change of financial year. So, it should not be the only criteria for stock selection while making any stock selection for investment.
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