Here’s a set of high dividend yield stocks that may help tide over a volatile market

The Indian stock market has corrected around 10% from the peak levels in October last year and slid again on Wednesday after a trading holiday, as jitters over the escalating war in Europe and deceleration in economic growth at home in the third quarter ended December 31 spooked investors.

Most stock market pundits are of the view that the time is not yet right for bottom-fishing as there is a room for more slide in stock prices over the next few days.

The result of the assembly elections in nearly half a dozen states will also impact investor sentiment. While voting for most constituencies is over, results of the state assembly elections will be out next week. While the ruling BJP is expected to regain the key state of Uttar Pradesh, the number of seats it manages to retain would be a signal of voter sentiment for the central government and its policymaking activities in the remaining two-year tenure.

Willy-nilly, there are hundreds of stocks that are generating cash from operations and have been showering part of the surplus profit to shareholders. Indeed, some stock prices have been beaten so much that their dividend yield itself runs in double digits. This means if one holds the stock, even assuming the stock value remains the same, an equity holder has been generating returns that easily beats most fixed-income saving instruments.

We looked at stocks whose current share price pegs a dividend yield of over 5.5%, which is the general fixed deposit rate offered by retail banks.

The sharp correction in stock prices have catapulted the dividend yields for some of these stocks. The set comprises companies of all shape and sizes, from micro caps to large caps.

Topping the list is a micro-cap firm Taparia Tools, which has a low equity base and has been generating solid cash given its size. In fact, the firm that has given Rs 120 a share back to its shareholders over the last 12 months. It is currently priced at just Rs 10.5 apiece. Its share price has crumbled 90% over the last three months but even with the share price locked in upper circuit on Wednesday, it offers an abnormal dividend yield of over 1,100%.

Vardhman Acrylics and state-run fuel retailer Bharat Petroleum Corporation are also among the stocks whose current dividend yield on a 12-month trailing basis is over 20%.

Among others with double-digit dividend yield are names like INEOS Styrolution, Power Finance Corp, Cheviot Company, NMDC, REC, Allsec Technologies, Coal India, Indian Oil Corporation, Goodyear India and Balmer Lawrie.

As can be gauged from the list, most of these are state-controlled firms that have been traditionally high dividend paying companies.

At the same time, there are more than two dozen other companies whose current share price means they are offering over 5.5% dividend yield.

This list includes Hinduja Global, PTC India, Power Grid Corp, Ircon International, Hindustan Petroleum, Vedanta, Gothi Plascon, IndInfravit Trust, Stanrose Mafatlal, Tide Water Oil, Choksi Imaging, Engineers India, India Grid Trust, Nalco, HUDCO and Nirlon.

Lower down the order, there are stocks like Shree Digvijay Cement, DB Corp, Indiabulls Housing, NHPC, Oracle Financial, SAIL, Rites, Majestic Auto, CESC, ONGC and Polyplex Corporation.