Two Stocks with Better Dividend Yield and Decent Appreciation

Investors should keep looking for high dividend-paying companies that have demonstrated steady capital appreciation over a period of time. Our endeavor is to bring out such companies for investors where they can generate a better return through a combination of dividend declared and capital appreciation during the holding period. After scanning the dividend-paying companies universe, we came across two stocks that offer a good combination of capital appreciation and better dividend yield. You should also make a note that good performance in the past is not an assurance of the same in future. Hence it is wise to take a prudent call.  

1. Welspun Corp (NS:WGSR) Ltd 

Welspun Corp is one of the flagship companies of the Welspun group. It is 2nd largest large diameter pipes producer in the world. The company offers a one-stop solution for all line pipe-related requirements with its wide range of high-grade line pipes. For the year ending March 2021, the company declared an equity dividend amounting to Rs 5 per share. At the current share price of Rs 154.15, it results in a dividend yield of 3.24%. The company has consistently declared dividends for the last 5 years. Let us take a quick look at Welspun Corp stock’s returns. In a year, the scrip delivered a decent 36.8%. On a year-to-date period, it returned 17.2%. The stock fetched 8.6% and 14.6% in the last six months and one month, respectively.

In FY2021, the company’s cash flow from operations was Rs 354.71 crore, up ~22 times from Rs 16.2 crore in fiscal 2020 and ~50% up from Rs 238.1 crore in fiscal 2019. Welspun Corp’s revenue grew 15.61% year-on-year to Rs 1,265.3 crore in the quarter ended September 2021 compared to Rs 1,094.5 crore in Q2FY2021. Its net profit fell 43.11% to Rs 84.90 crore in the quarter as against Rs 149.2 crore during the previous quarter ended September 2020. The scrip appears attractive based on key technical parameters such as RSI, MACD, and 10-day/20-day/30-day/50-day/100-day/200-day. 

2. Rail Vikas Nigam Ltd (NS:RAIV)

Rail Vikas Nigam Ltd implements projects related to the creation and augmentation of rail infrastructure capacity. It is involved in railway projects such as track laying, electrification, and bridges, etc. For the year ending March 2021, the company declared an equity dividend amounting to Rs 1.58 per share. At the current share price of Rs 36, it translates into a dividend yield of 4.4%. The company has consistently paid dividends in the last five years. The share has returned a whopping 87% in a year, 50.6% in year-to-date, 20.8% in six months, and 10.8% in a month. Don’t you think it’s a worth buy from the dividend and capital appreciation angle?

In Q2FY2022, RVNL reported a consolidated total income of Rs 4,025.82 crore, up 26.5% from Rs 3,182.6 crore in Q2FY2022. Net profit was Rs 279.2 crore, up 48.7% year-on-year. The company’s revenue CAGR was 26.7%, and net profit CAGR was 25.3% for a five-year period. The scrip appears good based on key technical indicators such as RSI and 50-day/100-day/200-day EMA. However, MACD - another important indicator, doesn't look good for the company.