Dividend stocks: These 5 small-cap stocks have higher yields than bank FD, PPF interest rate

Dividend stocks: Investing in stocks is primarily seen as a way to generate returns through value appreciation — where the price of the shares grows over time, allowing investors to sell them for a profit. However, there's an added bonus that many investors often overlook: dividends.

Dividends are paid by the companies, usually from its profit as a way to appreciate the shareholders. While not all stocks offer dividends, those that do provide an additional stream of income, making them even more attractive.

There are certain stocks that offer a higher dividend yield of 8% and more, that beat the returns given by bank fixed deposits or some other popular small-savings schemes like Public Provident Fund (PPF) of around 7-7.5%, making them even more lucrative.

According to a report by Axis Securities, five small-cap stocks - Aster DM Healthcare, MSTC, Chennia Petroleum, DB Corp and Allcargo Logistics - have managed to offer a dividend yield of 8-26% in the last one year, beating FD and PPF returns.

High-dividend-paying small-cap stocks

Here's a look at small-cap stocks with the highest dividend yields:

1. Aster DM Healthcare

While this healthcare small-cap stock is down 2% in the last one year, its dividend yield stands at a whopping 26% as it has paid ₹124 as dividend in the past 12 months.

2. MSTC Limited

This PSU stock, belonging to the e-commerce sector, has offered a ₹45.5 dividend in the last one year, taking the dividend yield to 10% at the current market price of ₹479. However, the stock has eroded investor wealth by 44% in the last one year, as per BSE data.

3. Chennai Petroleum Corporation

This small-cap stock belonging to the oil and gas sector has a dividend yield of 9%, according to Axis Securities, as it paid a dividend of ₹55 in the past 12 months. The stock performance has been a mixed bag as it has shed 34% in last one year but has rallied 145% in two years.

4. D.B. Corp

DB Corp has managed to reward shareholders with a dividend of ₹20 in the past 12 months (dividend yield 9%). The media stock has traded unchanged in the past one year.

5. Allcargo Logistics

This small-cap stock has a dividend yield of 8% after a dividend payout of ₹2.1 in the last 12 months. The company's market capitalization stood at ₹2,700 crore as of today, April 8.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.