Making an investment in dividend stocks is like investing in bonds with a floating return, having a little more risk. It gives an investor a stable and continuous return which the investor can use to meet his personal requirement or reinvest it. “Dividend stocks allow investors to earn both regular dividend return and capital return, i.e return because of the appreciation of the stock price. Therefore, these stocks could be a very good source of investment,” says Abhinav Angirish, Managing Director, Abchlor Investment Advisor.
Here are some of such stocks which have given a very good return in the past few years:
1. Sonata Software
Sonata Software Ltd is a global IT services company which provides services in business intelligence, application development management (ADM) and infrastructure management services. It has been a very good dividend-paying company for the last few years. The dividend yield has been a whopping 6.7% for the current financial year. It has been giving an average dividend yield of 5.52% from the last 4 years.
2. Rural Electrification Corporation
Rural Electrification Corporation Ltd (REC) is a public infrastructure finance company in India’s power sector. The company finances and promotes rural electrification projects across India. “The company has been distributing a high percentage of its earnings to its shareholders for the last couple of years. The dividend yield for the current financial year has been 2.1%. It has been reporting an average dividend yield of 5.2% from the last 4 years,” says Angirish.
3. PNB Gilts
The company was established as a wholly-owned subsidiary of Punjab National Bank with an initial paid-up capital of Rs 50 crore. The company undertakes more than 90% of its operations in government securities. The dividend yield for this small cap has been extraordinary, when compared to its peers and operation size. The current financial year is fetching investors a massive 4.9% just in dividend yield. This hasn’t been a surprise for the investors as the company has been consistently giving an average dividend yield of 4.25% from the last 4 years.
4. Infosys
Infosys is a global leader in technology services and consulting. It provides software development, maintenance and independent validation services to companies in all domains. Since the beginning, it has been a cash-rich company and has been making investors rich with it. “Since the last few decades, it has shown the Indian economy that shareholders’ wealth is their biggest priority and has proven this by regularly sharing its profits with the investors. The dividend yield for this company has been a secured 3% for the current financial year. Being an industry leader, It has easily been maintaining an average dividend yield of 4.05% from the last 4 years,” informs Angirish.
5. SQS India BFSI
The company is the largest independent provider of software testing and quality managed services. It provides end-to-end business process quality assurance for software-based systems and is based in Cologne, Germany. The dividend yield for this company has been 3.9% for this year and an average of 3.05% for the last 4 years.
(Disclaimer: These stock recommendations have been made by Abchlor Investment Advisor. Although due care has been taken while making these recommendations, investors are advised to consult their financial advisors before investing in any stock based on these recommendations.)
