In the world of investment, the allure of dividend stocks shines brightly, particularly in times of market exuberance. When markets become overvalued and uncertainty looms, dividend-paying equities offer stability, income, and a historical track record of resilience. Here’s why dividend stocks should be a component of your investment portfolio in such market conditions.
Furthermore, in an overvalued market, stock prices may be inflated, making it riskier to invest in growth stocks or those with high price-to-earnings (P/E) ratios. Dividend stocks, on the other hand, often represent companies with more stable and mature business models. They typically generate consistent cash flows, allowing them to pay dividends regularly. These dividends provide a steady income stream to investors, which can be especially attractive during market downturns.
Following are the top 10 stocks under Rs 100 with high dividend yield:
Stock | Market Cap (INR crore) | Price | Dividend Yield (%) | PE Multiple |
Housing & Urban Development Corporation Ltd | 14,643.87 | 73.15 | 5.24 | 8.41 |
CESC Ltd | 11,961.92 | 90.24 | 4.99 | 8.58 |
National Aluminium Company Ltd | 18,364.46 | 99.99 | 4.48 | 14.02 |
Shree Digvijay Cement Co. Ltd | 1,328.95 | 91.45 | 4.40 | 23.01 |
National Fertilizer Ltd | 3,740.67 | 76.25 | 3.67 | 18.66 |
PTC India Financial Services Ltd | 1,822.83 | 28.38 | 3.55 | 11.22 |
NHPC Ltd | 55,097.06 | 54.85 | 3.35 | 14.04 |
Indian Oil Corporation Ltd | 1,29,873.03 | 91.97 | 3.24 | 5.29 |
Union Bank of India | 71,967.47 | 97.09 | 3.09 | 6.96 |
Bank of Maharashtra | 30,832.46 | 45.81 | 2.81 | 10.17 |
In conclusion in an overvalued market, dividend stocks emerge as a prudent choice, providing income, stability, and resilience. Their historical track record and the power of compounding make them a valuable asset in an investment portfolio. Diversifying with dividend stocks can help investors navigate the challenges of market excess with greater confidence.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions
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