Penny stocks that paid the best dividends during 2022

Stock markets

by 5paisa Research Team Last Updated: Jan 27, 2023 - 11:07 am 2.8k Views

Investors looking for comfort and safety of just keeping money in their savings bank accounts have seen the pay-out dwindling over the years as the interest rate cycle went downwards. Most banks brought down the interest rates they provide on basic savings accounts to around 3-3.5% over the last few years. While this has started moving up, it still remains much below historical levels.

But there are other options with slightly higher risk.

Those willing to take the additional risk of investing in low-priced stocks, including penny stocks, need not only depend on trading to make money. In some cases, the dividend yields in such stocks too beat the interest rate offered by banks.

Companies which are generating profits share part of the surplus cash pumped out from the business to reward their shareholders as dividends. These bring additional gains for investors even if the share price has remained static.

Some conservative investors and indeed even mature ones pick stocks that have a generous dividend policy. This tends to keep liquidity and adds to total returns they can churn from a single investment.

One of the ways to pick stocks that reward shareholders over and above the price movement is to look at dividend yields. In simple terms, it is the pay-out being shared with stockholders as a percentage of the stock price.

Top dividend paying stocks

We scanned through the list of top dividend paying stocks in India in 2022 for high dividend yield stocks based on the current price and dividend pay-out over the last one year.

If we twine this to stocks priced under Rs 50, virtually covering the penny stock universe, we get a list of 13 stocks with dividend yield of 4% or more.

These include companies such as IL&FS Investment, S P Capital Fin, Oswal Green Tech, Indian Railway Fin, Standard Industries, PTL Enterprises, SJVN, Gothi Plascon, Saven Technologies, NHPC, Sarla Performance, Geojit Financial and HUDCO.

Notably, investors should not look at high dividend yield stocks as a safe pick as they may still lose money if the share price goes down and they are forced to sell it for liquidity purposes. Moreover, the companies may reduce the dividend in the future and the high payout could be due to a one-time event, like an asset sale.

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