Safer Bets in Uncertain Markets

The prime motive of investors who invest in the stock market is to create wealth. Some investors are aggressive and want more returns and have a greater risk appetite. A defensive investor on the other hand wants a consistent return over the long term with minimum risk. 

While capital appreciation is a way to make money in the stock market, a less risky alternative is to invest in good quality stocks which have a high dividend yield. 

To share the profits and showcase the financial strength of the company, companies pay a dividend. In current volatile times when recession fears are pulling investors away from the market, dividend-paying stocks become a safe haven for investors. Some companies pay high dividend yields which do not just beat inflation but also give returns much higher than comparable financial investments. However, one has to be very careful while picking such dividend-paying stocks so that they do not incur a capital loss in lieu of getting dividends. 

Two dividend stocks to invest in current volatile times

1.  Vedanta (NS:VDAN)

Vedanta Ltd  is a diversified natural resource group involved in exploring, extracting, and treating minerals and oil & gas with other major businesses like chip manufacturing. The group engages in the exploration, manufacturing, and sale of zinc, silver, copper, aluminum, iron ore, lead, and oil & gas. It has a presence across India, Namibia, Ireland, Liberia, UAE, and South Africa
Its other businesses include chip manufacturing, commercial power generation, steel manufacturing & port operations in India, and manufacturing of glass substrates in South Korea and Taiwan.

Apart from what the company does it is important to know Vedanta has a history of paying a dividend consistently and they have reaffirmed it by paying even in tough times like COVID-19. Another interesting thing that might attract Vedanta is that it is trading near a 52-week low due to fear of recession in the west, now it is moving upward due to a lower P/E (..) ratio than its industry partners. But since the metal prices have corrected so much in recent months and other commodities have also fallen to a 52-week low due to falling demands, one must take an informed decision before entry.


2. Coal India (NS:COAL)

Coal India the renowned Maharatna ( Maharatna” status is granted to a PSU that has recorded  Rs. 5,000 crores of net profit or above for three years continuously, an average yearly turnover of Rs. 25,000 crores for 3 years or should have an average annual net worth of Rs. 15,000 crores for 3 years) and is headquartered in Kolkata. It is a government of India-owned coal mining and refining entity, having sales at a 5-year high of  FY22 at Rs 1,09,713 crores, and is the largest coal producer in the world. In FY22 company declared a dividend per share at Rs 17 which is also at 5 years high.

Over the past, one-year company’s share has given a 30-38% return. It also makes it attractive for investment since the company has given decent returns in tough times, but since the commodities prices are in recession due to low demand causing ongoing war, one must take an informed decision. 


Both the stock looks an attractive pick from a dividend point of view but investors must take note of the current situation of war and recession in the world and since both the stock are related to the commodity market so the investor can also check their commodity prices and demand of that commodity before buying a stock and must consult a SEBI registered Investment Advisor like Tavaga.

Disclaimer:- This article is only for educational purposes and should not be construed as a buy/sell recommendation.