List of top ten midcap stocks which have paid the highest dividends for 2022
Indian share markets are on a roller coaster ride once again. This has raised the need for stable income assets and consistent payouts, to protect against high inflation and high interest rates.
For years, investors have looked at dividend-paying stocks as an answer for steady income. By providing much-needed income that other types of assets have lacked, dividend stocks have become the go-to investment.
The preference for these dividend stocks intensified after the US Fed embarked on the ambitious campaign to raise interest rates to rein in inflation.
With billions of dollars pouring into dividend stocks, the demand for these stocks has increased significantly.
Among the many categories, midcap stocks usually have a higher growth potential to generate consistent cash flows.
Keeping that in mind, we take a look at 2022’s ten biggest dividend-paying midcaps. Add these to your 2023 watchlist.
#1 Oracle Financial Services
First on the list is Oracle Financial Services.
For the financial year 2022, the company declared a final dividend of Rs 189 per share, with a dividend payout ratio of 86.8 per cent. This payout was on the back of a marginal reduction in employee retention costs.
Oracle Financial Services has been a consistent dividend payer. Since 2002, the company has declared 13 dividends. We even covered an in-depth editorial on why Oracle Financial is the greatest dividend stock of all time.
The five-year average dividend payout ratio stands at 75.9 per cent. The dividend yield over the past five years has averaged 4.8 per cent.
Oracle Financial Services is a subsidiary of Oracle Global (Mauritius). With strong in-house R&D centers, Oracle has produced products used by banks in more than 150 countries around the world. Oracle assists in implementing artificial intelligence (AI) in the company and IT processes.
The company has a healthy cash balance of Rs 69 billion as of 31 March 2022, up 3.6 per cent YoY.
With its foray into the sovereign cloud regions with EU-based users, the company is looking forward to expanding its cliental base. This is expected to boost the profits, inching the cash balance higher.
Oracle Financial Services’ Dividend History
#2 Bayer CropScience
Second, on the list is Bayer CropScience.
The company declared a final dividend of Rs 150 per share for the financial year 2022. The dividend payout ratio of the company stands at 104.5 per cent. The 17 per cent rise in net sales was the driving factor for the payouts.
Since 2001, the company has paid a total of 25 dividends.
The payout ratio over the last five years stands at 54.4 per cent, while the dividend yield stands at 1.4 per cent.
Bayer CropScience is an Indian subsidiary of Bayer AG, the world’s largest pharmaceutical and life sciences company based out in Germany.
It provides various products and services through its 3 business divisions: crop science, pharmaceutical products, and consumer healthcare.
The company has a healthy cash balance of Rs 7.9 billion as of 31 March 2022, down 34 per cent YoY, due to an increase in manufacturing costs.
The company strengthens its manufacturing for the financial year 2023 by setting up a new plant to increase the global production volumes.
Bayer CropScience’s Dividend History
#3 Bajaj Holdings and Investment
Third on the list is Bajaj Holdings and Investments.
The company has declared a final dividend of Rs 115 per share for the financial year 2022, with the dividend payout ratio coming at 31.6 per cent. The 17 per cent rise in net earnings was the driving factor for the payouts.
Since 2001, the company has paid a total of 25 dividends. The payout ratio over the last five years stands at 17.5 per cent, while the dividend yield stands at 1.6 per cent. It was due to the increase in the profits.
Bajaj Holdings & Investment is a non-banking finance company (NBFC). The company was formed when Bajaj Auto de-merged in 2007.
The manufacturing business was transferred to Bajaj Auto (BAL), while the wind farm and financial services business was vested with Bajaj Finserv (BFS).
The company has a healthy cash balance of Rs 328.9 million as of 31 March 2022, down 39 per cent YoY, due to a decrease in sales and weak markets.
The company is planning to reduce the capex for 2023, due to weaker markets and planning to focus on the earnings from dividend and interest income.
Bajaj Holdings and Investment Dividend History
#4 Hindustan Aeronautics
Fourth on the list is Hindustan Aeronautics.
For the financial year 2022, the company declared a final dividend of Rs 50 per share, with a dividend payout ratio of 37 per cent. This payout was due to a 91 per cent jump in the net profit of the firm.
Since 2008, the company has declared 15 dividends.
The five-year average dividend payout ratio stands at 75.9 per cent. The dividend yield over the past five years has been 3.6 per cent.
Hindustan Aeronautics manufactures and maintains aircraft and helicopters for the Indian Airforce, Indian Army, ISRO, Indian Navy, and Indian Coast Guard, among others. As of March 2022 quarter, it had a healthy cash balance of Rs 143 billion, up 99 per cent YoY.
To increase sales, HAL signed a $716 million deal with GE Aviation for the supplies of engines.
It has also set up a Rs 2.1 billion Integrated Cryogenic Engine Manufacturing Facility (ICMF) that would cater to the entire rocket engine production under one roof for ISRO. This will eventually result in higher profits for the company.
Hindustan Aeronautics Dividend History
#5 Colgate
Fifth on the list is Colgate.
Colgate declared an interim dividends of Rs 21 and a final dividend of Rs 19 per share. For the financial year 2022, the company paid Rs 40 per share, with a dividend payout of 100.9 per cent. This higher dividend payout was due to a 6 per cent increase in the sales of the company.
Since 2001, the company has declared 58 dividends. The five-year average dividend payout ratio stands at 94.3 per cent. The dividend yield over the past five years has been 2.3 per cent.
Colgate-Palmolive (India) is India’s leading provider of scientifically proven oral care products. The range includes toothpaste, toothpowder, toothbrushes, and mouthwashes.
The cash balance for the financial year 2022 stands at Rs 3.5 billion, up 37 per cent YoY. For the financial year 2023, company is focusing on increasing the free cash by increasing its sales.
Colgate’s Dividend History
#6 Balkrishna Industries
Sixth on the list is Balkrishna Industries.
Balkrishna Industries, for the financial year 2022, declared two interim dividends of Rs 4 per share, a special dividend of Rs 12 per share and a final dividend of Rs 4 per share each. The company paid a total of Rs 28 per share, with a dividend payout ratio of 37.7 per cent.
The company declared a special dividend on the occasion of the diamond jubilee year. Since 2002, the company has declared 48 dividends. The five-year average dividend payout ratio stands at 29.3 per cent. The dividend yield over the past five years has been 1.3 per cent.
Balkrishna Industries is engaged in the business of manufacturing and selling of Off-Highway Tyres (OHT). In the specialist segments such as agricultural industrial, construction earthmovers, and port mining.
The cash balance for the financial year 2022 stands at Rs 317 million, down 34 per cent YoY.
The company has planned a capex investment of Rs 17 billion to ramp up production over 2-3 years. It is due to an increase in demand for tyers, further boosting sales.
Balkrishna Industries Dividend History
#7 Supreme Industries
Seventh on the list is Supreme Industries.
For the financial year 2022, Supreme Industries declared an interim dividend of Rs 6 per share and a final dividend of Rs 18 per share. The company paid a total of Rs 24 per share, with a dividend payout ratio of 39.9 per cent. The high payout was due to a decrease in the finance cost and an increase in sales.
Since 2000, the company has declared 39 dividends. The five-year average dividend payout ratio stands at 38.1 per cent. The dividend yield over the past five years has been 1.2 per cent.
Supreme Industries is a leader in India’s plastic industry. It is engaged in the production of plastic products and operates in various product categories like plastic piping systems, Cross laminated film and many more.
The cash balance for the financial year 2022 stands at Rs 5.3 billion, down 31 per cent YoY. It was due to higher raw material prices.
For the financial year 2023, to upscale the production, it has planned a capital expenditure of Rs 7 billion across the various segments, including bath fittings, composite LPG cylinders and many more.
Supreme Industries’ Dividend History
#8 Cummins India
Eight on the list is Cummins India.
Cummins declared an interim dividend of Rs 8 per share and a final dividend of Rs 10.5 per share.
The company paid a total of Rs 18.5 per share, with a dividend payout ratio of 60.9 per cent. The sales for the company rose by 41 per cent, leading to an increase in dividend payout.
Since 2001, the company has declared 44 dividends. The five-year average dividend payout ratio stands at 69.2 per cent, with a dividend yield of 2.4 per cent.
Cummins designs, manufactures, and sells diesel and alternative fuel engines, generators, and related accessories. It also provides after-sale services.
The company has a strong domestic presence. Being a part of Cummins USA, it also has a global presence. With robust sales, the company’s cash balance saw a growth of 47 per cent YoY to Rs 14.3 billion.
Going forward, the company plans to increase its presence in the fishing boat segment to further boost sales.
Cummins India’s Dividend History
#9 CRISIL
Ninth on the list is CRISIL.
For the financial year 2022, the company has declared a final dividend of Rs 15 per share, with the dividend payout standing at 72 per cent. The increase in payout was due to the reduction in sales tax and higher sales.
Since 2001, the company has declared 69 dividends. The five-year average dividend payout ratio stands at 66.5 per cent, with a dividend yield of 1.7 per cent.
CRSIL is one of the leading rating agencies in India. It also provides research and risk advisory services.
The company’s rating services span an entire range of debt instruments for over 8,000 companies. It has a presence across the globe and draws most of its revenue from North America, India, and Europe.
Due to the higher demand for research reports due to the prevailing volatile market, the cash balance saw a growth of 5.6 per cent YoY.
Going forward, CRISIL plans to leverage its parent company’s brand (S&P Global) to expand in the international market to boost sales.
CRISIL’s Dividend History
#10 Emami
Last on the list is Emami.
For the financial year 2022, the company has declared a final dividend of Rs 8 per share, with the dividend payout standing at 41.5 per cent. The acquisition of Dermicool and other brands witnessed a 30 per cent growth boosting the dividend payouts.
Since 2000, the company has declared 29 dividends. The five-year average dividend payout ratio stands at 27.8 per cent, with a dividend yield of 1.5 per cent.
Emami is one of India’s leading FMCG companies engaged in manufacturing & marketing personal care & healthcare products. Emami is the flagship company of the diversified Emami Group.
For the March 2022 quarter, the cash balance of the company stands at Rs 1.2 billion, down by 67 per cent due to acquisition expenses. Going forward, the company is eyeing expansion in the ayurvedic market to increase its presence.
Emami’s Dividend History
To conclude
Midcap stocks are often overlooked from a dividend investing perspective.
Midcap stocks act faster in the changing market dynamics and can produce better returns. Due to this higher growth potential trait, they generate consistent free cash flows.
They also tend to enjoy greater diversification, better access to capital, and more proven management teams compared to small-cap companies.
With increasing free cashflows and larger payouts, they are considered a good buffer during times of market volatility.
Due to the tussle between the bears and bulls, midcap dividend stocks are among the best bargain on the board. However, not all have created wealth equally.
If you are investing in dividend stocks, you should investigate the company’s history of dividend payments and whether they could continue to make higher payouts.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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