After adjusting for income taxes at a rate higher than 30% of the slab, the deposit rates of banks staterun 'fixed deposit rates for 12 months of work over 6.5%. The current slide in share prices led to consistent dividend paying stocks with HCL Infosystems (HCLI), Ashok Leyland, Indiabulls Financial Services, Shipping Corporation of India and son of a manufacturer of synthetic fibers yields JBF industries tax profits exceeding deposits adjusted at fixed rates.

The dividend yield of Patni Computer is over 34% while for HCLI is 11.2% and JBF - 6.4% ID there. The dividend yield is the ratio of annual dividend per share at current market price of securities. It is a measure of return on equity investment.

Falling share prices are often throw up opportunities for value-based investors, but only after careful analysis. The time-tested strategy is to exploit the erosion of market share and identify the stocks that trade relatively higher dividend yields.

There are over 40 companies in the BSE-500 index currently available in a dividend yield of around 4% or more.

However, investors must take into account certain facts and look at the same time when the high dividend yield stocks. For example, companies that pay dividends extras in a given year may show a sudden increase of hundreds. Patni Computer Systems, a yield of almost 25% complete our list of top dividend companies.

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Such a high yield, however, because of its interim dividend of Rs 63 in August 2010, which is higher compared to the performance of RS 3 because of the four previous years. The company distributed the excess cash reserves to shareholders, before its acquisition by Igate in January 2011. Thus, a repetition of a high dividend is unlikely in the short term.

Source: [ET]