Top Dividend Paying Penny Stocks in India To Watch Out in 2023

0
2

Top Dividend Paying Penny Stocks: Are you a risk-loving investor with an appetite for potential multi-bagger penny stocks? What if we told you that there are dividend-paying penny stocks, too? You can expect regular passive income along with prospects of impressive gains. In this article, we present you the top dividend-paying penny stocks investors can add to their watchlist.

List of Top Dividend Paying Penny Stocks

So without further ado, let us quickly jump to learn about the top dividend paying penny stocks on BSE and NSE.

Top Dividend Paying Penny Stocks #1 – PTL Enterprises

Top Dividend Paying Penny Stocks - PTL Enterprises
CMP ₹33.4 Market Cap (Cr.) ₹442
EPS ₹2.04 Stock P/E 16.4
RoCE 9.3% RoE 5.6%
Promoter Holding 69.8% Book Value ₹49.3
Debt to Equity 0.07 Price to Book Value 0.68
Net Profit Margin 52.2% Operating Profit Margin 90.1%
2-Yr Avg Dividend Payout 63.50% Dividend Yield 5.99%

Established in 1959, PTL Enterprises is a subsidiary of Apollo Tyres. It was acquired by Apollo Tyres in 1995. It owns a tyre manufacturing facility that has been leased out to the former. The contract is on a long-term basis and the plant & production are both managed by Apollo.

As of now, PTL receives Rs 63 crore every year from the tyre manufacturer, which is its only operating revenue stream. As for the shareholding structure, Apollo holds a majority 69.82% stake in the company. Additionally, the Kerala Government owns a 7.37% stake.

Its revenue has been the same at Rs 63 crore for the last four financial years. ETL doesn’t carry any debt and presently trades at a price-to-earnings ratio of 16.4.

The stock offers a dividend yield of 5.99%. Its dividend payout ratio stood at 80%, 47%, and 38% in FY22, FY21, and FY20 respectively.

Top Dividend Paying Penny Stocks #2 – Steel City Securities

Top Dividend Paying Penny Stocks - Steel City Logo
CMP ₹61.8 Market Cap (Cr.) ₹93
EPS ₹8.47 Stock P/E 7.3
RoCE 18.4% RoE 13.8%
Promoter Holding 64.5% Book Value ₹72
Debt to Equity 0.00 Price to Book Value 0.87
Net Profit Margin 21.7% Operating Profit Margin 25.3%
2-Yr Avg Dividend Payout 38% Dividend Yield 4.85%

Steel City Securities is a leading stock broker for retail traders/investors in South-Indian states. In addition to its vital presence in Andhra Pradesh, its customers are spread across Tamil Nadu, Karnataka, Orissa, Chattisgarh, and Maharashtra.

The company has memberships with NSE, BSE, MCX, NCDEX, and MC-SX. It offers trading services for multiple financial instruments such as equity, futures & options, commodities, and currency derivatives. 

In addition to this, it is also engaged in the distribution of mutual funds, IPO, insurance products, various types of loans, and more. 

Its operating revenue grew by 25%  to Rs 64 crore in FY22 from Rs 51 crore in FY20. During the same period, its net profit doubled to Rs 14 crore.

The broking company has a high promoter holding of 64.5%. It trades at a price-to-earnings ratio of 7.3 with a dividend yield of 4.85%. The management has maintained a high dividend payout ratio over the last seven years.

Top Dividend Paying Penny Stocks #3 – Sarla Performance Fibers

Top Dividend Paying Penny Stocks - Sarla Performance Logo
CMP ₹43.7 Market Cap (Cr.) ₹365
EPS ₹4.75 Stock P/E 9.2
RoCE 13.6% RoE 12.7%
Promoter Holding 55.9% Book Value ₹49.5
Debt to Equity 0.32 Price to Book Value 0.88
Net Profit Margin 11.0% Operating Profit Margin 18.6%
2-Yr Avg Dividend Payout 17.5% Dividend Yield 4.57%

Previously known as Sarla Polyester, Sarla Performance Fibres engaged in the manufacturing and export of polyester & nylon textured, twisted & dyed yarns, covered yarns, high tenacity yarns, and sewing thread.

The textile company produces more than 250 types of value-added yarns and threads. In addition to its manufacturing plants outside Mumbai in Silvassa, Dadra, and Vapi, Sarla has a global presence with its operations in Portugal, and Europe.

On an annual basis, its sales rose by 65.12% to Rs 426 crore in FY22 from Rs 258 crore a year earlier. Along the same lines, the net profit grew by 74.07% to Rs 47 crore from Rs 27 crore.

Its shares presently trade at an attractive P/E ratio of 9.2. It is a mix of growth and dividend-paying penny stock with a dividend yield of 4.57%. 

Barring the pandemic impacted FY21 and FY20, it has maintained a dividend payout of upwards of 35% in the last five years. In FY22, the management resumed the dividend continuity by giving out 35% of the earnings as dividends.

Top Dividend Paying Penny Stocks #4 – Geekay Wires

Geekay Wires Limited Logo
CMP ₹76 Market Cap (Cr.) ₹79
EPS ₹11.10 Stock P/E 6.9
RoCE 14.1% RoE 18.8%
Promoter Holding 59.3% Book Value ₹55.1
Debt to Equity 1.18 Price to Book Value 1.38
Net Profit Margin 3.5% Operating Profit Margin 3.9%
2-Yr Avg Dividend Payout 48.5% Dividend Yield 3.30%

Geekay Wires is a Hyderabad-based manufacturer of steel products such as collated nails, bulk nails, stainless steel fasteners, galvanized steel wires, and more. The company was founded in 1989 and is a part of the Kandoi Group.

It has an installed production capacity of 20,000 MT per annum. It is one of the key suppliers of Power Grid Corporation of India. In addition to catering to domestic customers, Geekay also exports its products to other countries including the UK, the USA, Canada, etc. 

Its products find applications across industrial, power transmission, cable & conductor, commercial construction, automotive, marine & mine, wind & solar energy, and agricultural uses.

The management started paying dividends in FY21. The dividend payout ratio stood at 29% and 68% in FY22 and FY21 respectively. The stock currently trades at a P/E ratio of 6.9 and a dividend yield of 3.30%.

Top Dividend Paying Penny Stocks #5 – GPT Infraprojects

GPT Group Logo

Headquartered in Kolkata, GPT Infraprojects is a flagship company of the GPT Group. It is involved in the construction of civil and infrastructure projects. Along with this, it also manufactures concrete sleepers for railways.

Its construction operations are restricted to India. However, the sleepers production business is spread across India, South Africa, Namibia, and Ghana. 

GPT has taken up EPC contracts for roads, bridges, railways, power, and industrial purposes. 

The revenues of the construction company have steadily increased over the previous seven years. It reported a net profit of Rs 32 crore on sales of Rs 675 crore in FY22. It has a high promoter shareholding of 75%.

In addition to the growing topline, GPT has remained profitable for more than 10 financial years. This is a big feat for a small company with a market capitalization of Rs 316 crore.

Its dividend payout ratio stood at 36%, 36%, and 29% in FY22, FY21, and FY20 respectively. The stock presently trades at a P/E of 11, offering a dividend yield of 2.74%.

CMP ₹54.3 Market Cap (Cr.) ₹316
EPS ₹5.18 Stock P/E 11.0
RoCE 13.9% RoE 9.3%
Promoter Holding 75% Book Value ₹45
Debt to Equity 0.98 Price to Book Value 1.21
Net Profit Margin 3.4% Operating Profit Margin 12.5%
2-Yr Avg Dividend Payout 36% Dividend Yield 2.74%

List of Top Dividend Paying Penny Stocks

The table below puts together the top dividend paying penny stocks discussed above.

Company Name CMP(Rs) Market Cap(Rs Cr) Dividend Yield (%) 2-Yr DividendPayout (%)
PTL Enterprises 33.4 442 5.99 63.5
Steel City Securities 61.8 93 4.85 38.0
Sarla Performance Fibers 43.7 365 4.57 17.5
Geekay Wires 76.0 79 3.30 48.5
GPT Infraprojects 54.3 316 2.74 36.0

Research Methodology

For finding out the top dividend-paying penny stocks, we used the Stock Screener of Trade Brains Portal. The table below highlights the criteria applied for filtering such companies from the large pool of the stocks available on BSE and NSE.

Parameters Lower Limit Upper Limit
Promoter shareholding (%) 45 75
Dividend payout (%) 25 100
Current price (Rs) 0 85
PE Ratio TTM 0 50
Market Cap (Rs Cr) 50 500

This left us with some 19 stocks on which we exercised subjective judgment to arrive at India’s top dividend paying penny stocks.

In Conclusion

We are at the end of our article on ‘Top Dividend Paying Penny Stocks’. If identified accurately, such penny stocks can result in multi-bagger gains with a regular passive income in dividends. 

However, it is also advised to limit portfolio exposure to penny stocks. Therefore, the dividend income from penny stocks might be insignificant to fulfil the needs of the investors. Do you think investors should make a sizable investment in penny stocks? How about we continue this conversation in the comments below?

You can now get the latest updates in the stock market on Trade Brains News and you can also use our Trade Brains Screener to find the best stocks.

tradebrains portal app download

Start Your Financial Learning Journey

Want to learn Stock Market and other Financial Products? Make sure to check out, FinGrad, the learning initiative by Trade Brains. Click here to start your financial learning journey with us. And do not miss out on the Introductory Offer!!