Earn 8% plus from dividend yield portfolio – India

This is a special report presented for High networth clients (HNI) who are looking at capital appreciation along with Dividend income. However, main theme is to earn dividend income but one should also look capital appreciation for longer period of time.

After 2008 global turmoil, there has been a debate on earning from dividend yield stocks and earning from rental property (Residential and as well as commercial).  Both of them scored high on various parameters such as principal of an investment, cash flow benefits & risk profiling. It’s a superior vehicle for building wealth for the investor. Though the yardstick for analyzing dividend paying stocks and rental property asset may be different for our priority customer, but both of them certainly can match cash flow requirement and ability to provide the higher return in alternate asset class. One can look at another article at

We have presented a portfolio is which focus on

1)      Diversification more than 10 stocks & across the sector

2)      We feel “banking” should be outperform over the period of time & specially PSU ( more than 60% allocation).

3)      We focus on select quality company

4)      One can look at diversification based on his risk and return profile & also look at allocation

5)      One can take higher yield if he pursue higher risk . if he allocatate more in higher yild company the portfolio return will be higher.

6)      One should build portfolio rather an investing in few one or two stocks

 

Dividend Yield Portfolio
Sr No Company Category Sector Market cap FV BV CMP Dividend Yield P/E Allocation Sum allocted Dividend Received
1 Dena Bank Mid Cap Banking 3338 10 111 63 5.8 9.21% 6.91 10% 10000 921
2 Syndicate bank Mid Cap Banking 6364 10 178 102 12.2 11.96% 2.38 10% 10000 1196
3 Corporation Bank Mid Cap Banking 5041 10 600 301 23.5 7.81% 3.6 10% 10000 781
4 India Bank Mid Cap Banking 5718 10 235 123 9.6 7.80% 3.76 5% 5000 390
5 Union Bank Mid Cap Banking 9156 10 272 145 10.7 7.38% 5.5 10% 10000 738
6 Canara Bank Large Cap Banking 13210 10 512 286 19.5 6.82% 4.6 10% 10000 682
7 Bank of India Large Cap Banking 15594 10 376 243 15 6.17% 5.76 10% 10000 617
8 India Bulls Housing Mid Cap NBFC 9512 2 168 284 32 11.27% 5.7 10% 10000 1127
9 Oil India Large Cap Oil & Gas 29712 10 320 494 40 8.10% 9.1 5% 5000 405
10 Clarient Mid Cap Diversified 1803 10 215 676 30 4.44% 23.8 5% 5000 222
11 Balmal Lawari Small Cap Diversified 984 10 302 345 17.6 5.10% 6.25 5% 5000 255
12 Graphite India Mid Cap Diversified 1737 2 90 88.9 3.5 3.94% 14.87 5% 5000 197
13 IBSEC Small Cap Finance 517 2 8.64 20 4 20.00% 5.07 5% 5000 1000
100% 100000 8530

With this lets look at advantage of dividend yield & our portfolio

As per Wikipedia – A financial ratio that shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock. Dividend yield is calculated as dividend per share/ Current Market Price.

Few parameters are

Parameter Dividend Yield
Investment vehicle Blue Chip Stocks
Liquidity High
Exit Barrier No
Capital Appreciation Yes
Legal & compliance Risk No
Leverage on Collateral Yes, market accepted
Assured No
Stability  of earning Low
Capital Guarantee Low
Biggest Risk Corporate Governance, one should diversify

Generally, this form of investment is particular suites for High Networth Investor. In modern day, especially after the housing bubble, many investors have preferred dividend yield method.

 

One should take advise of his investment manager before taking any investment decision. One may contact me at Bonpriya@gmail.com for further feedback & suggestion.

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One Comment to Earn 8% plus from dividend yield portfolio – India

  1. […] Another article on Dividend investing – one may read at – http://www.einfomet.com/earn-8-plus-from-dividend-yield-portfolio-india […]

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