However, a different approach to the stock market can increase returns on a stock. This brings us to high dividend-yield stocks. Such stocks give high dividends and the capital value increases when the markets turn around.
Historically, such stocks are the best performers in a stable market. And, when these stocks are battered during market fall, the value of dividend only increases due to their lower market price.
To pick such stocks, you need to look at the dividend-yields of companies. Calculating dividend-yield is simple. Just divide dividend per share by the current market price and multiply it by 100. So, if the market price of a stock is Rs 100 and the dividend paid is Rs 10, the dividend yield will be 10 per cent (10/100 X 100).
There are 310 companies whose stocks are currently available at dividend-yield higher than the interest of 3.5 per cent that an investor receives in a bank