High Dividend Yield Stocks have always been the prudent investors favourite for obvious reasons. The reason why investors love high dividend yield stocks is because such companies generate good cash flows year after year, are run by efficient managements who are also shareholder-friendly. Dividend Yield stocks are also preferred because they provide a natural protection against a downside to the stock value.
We covered some high dividend yield stocks here (see 5 High Dividend Yield Stocks For Your Portfolio & High Dividend Yield Stocks
Now Motilal Oswal has done some fine research into expected high dividend yield stocks so that investors can be ahead of the curve and position themselves before the hordes wake up and drive up stock prices
Motilal Oswal explains that Dividend payout has historically proved to be a good indicator of management quality and continues to be a keenly watched. High Dividend yield stocks also tend to be good bets as a defensive investment strategy. As it is close to dividend payout time after the annual results, Motilal Oswal has looked at stocks with high dividend yields out of the MOSL coverage universe based on company announcements. Some companies have not declared record dates as of yet. For these, Motilal Oswal have given the months in which the record dates are likely based on past trend. A list of shortlisted companies is presented below:
| Company | CMP | EPS | DPS | Div Yld | P/E or P/ABV | Target | Upside | Announced \ Expected Ex-Date | ||||
| FY11 | FY12E | FY11 | FY12E | FY11 | FY12E | FY11 | FY12E | |||||
| Chennai Petro | 232 | 34.3 | 34.9 | 12 | 10 | 5.2 | 4.3 | 6.8 | 6.6 | 260 | 12% | Aug. / Sept. |
| IL&FS Investmart | 34 | 3.4 | 3.5 | 1.5 | 1.5 | 4.4 | 4.4 | 10 | 9.9 | 60 | 76% | July / Aug. |
| NIIT Tech | 191 | 31 | 31 | 7.5 | 8 | 3.9 | 4.2 | 6.2 | 6.2 | 250 | 31% | July / Aug. |
| Andhra Bank* | 145 | 22.6 | 27.2 | 5.5 | 6 | 3.8 | 4.1 | 1.3 | 1.1 | 195 | 34% | 15-Jun-11 |
| Tata Motors DVR | 606 | 136.5 | 150.5 | 20.5 | 20.5 | 3.4 | 3.4 | 4.4 | 4 | N.A. | N.A. | 19-Jul-11 |
| J&K Bank* | 790 | 126.9 | 158.5 | 26 | 30 | 3.3 | 3.8 | 1.1 | 1 | 975 | 23% | July/Aug |
| OBC* | 351 | 51.5 | 57.3 | 10.4 | 12.5 | 3 | 3.6 | 1.1 | 1 | 488 | 39% | 14-Jun-11 |
| Bajaj Auto | 1351 | 90.4 | 103.1 | 40 | 45 | 3 | 3.3 | 14.9 | 13.1 | 1545 | 14% | 29-Jun-11 |
| Deepak Fertilizer | 179 | 20.8 | 25.1 | 5 | 5.5 | 2.8 | 3.1 | 8.6 | 7.1 | 200 | 12% | July / Aug. |
| PTC India | 85 | 5.7 | 8.4 | 2.1 | 2.2 | 2.5 | 2.6 | 14.8 | 10.1 | 127 | 50% | September |
| Union Bank* | 323 | 39.5 | 53 | 8 | 10 | 2.5 | 3.1 | 1.7 | 1.4 | 425 | 32% | 16-Jun-11 |
Further, there are three more companies that have a high dividend yield but have paid part of the dividend during the year as interim dividend.
| Co | CMP | EPS | DPS | Div Yld | P/E or P/ABV | Target | Upside | Announced \ Expected Ex-Date | ||||||||
| FY11 | FY12E | FY11 | FY12E | FY11 | FY12E | FY11 | FY12E | |||||||||
| Hero Honda | 1858 | 100 | 115 | 105 | 105 | 5.7 | 5.7 | 18.5 | 16.2 | 1891 | 2% |
Aug/Sep |
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| Final dividend = Rs. 35, Rs. 70 interim paid out, yield ~2% even on final dividend | ||||||||||||||||
| ACE | 45 | 4.4 | 5.6 | 2 | 2.5 | 4.4 | 5.6 | 10.2 | 8 | 80 | 78% |
July/Aug |
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| Final dividend = Rs. 1, Re.1 interim paid out, yield=2.3% even on final dividend | ||||||||||||||||
| REC* | 216 | 26 | 29.7 | 7.5 | 8.5 | 3.5 | 3.9 | 1.7 | 1.5 | 310 | 44% |
Aug/Sep |
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| Final dividend = Rs.4, Rs.3.5 interim paid out, yield=1.8% even on final dividend | ||||||||||||||||
High Dividend Yield Stocks To Buy In 2011
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