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Let us start with a simple question.
What would you rather do: spend Rs 50,000 or Rs 10,000 to earn Rs 500 in annual dividends?
You’d pick the second option, right?
And that’s the power of high-yield dividend stocks.
Today, we’re diving into some of these income machines in the penny stock space. These are low priced stocks that pay much higher dividends than the average stock.
Some investors think that penny stocks are risky, or low-quality companies.
But here’s a little secret most investors overlook. If chosen carefully, especially the ones that keep making regular payouts, these smaller companies can turn out to be big winners for your portfolio.
In this article, we’ll show you five high-yield penny stocks that stand out from the pack.
Advani Hotels & Resorts (India)
Advani Hotels & Resorts owns and operates the Caravela Beach Resort Goa, a 5-star deluxe property located on Varca Beach in South Goa.
The resort has 201 rooms and offers a range of amenities, including a golf course, multiple dining options, and extensive event facilities.
Advani Hotels core business includes providing guest accommodation, food and drink facilities, entertainment facilities, among other things.
The company has a strong track record of rewarding its shareholders with consistent dividends.
Over the past two decades, excluding covid-hit FY21, Advani Hotels has distributed dividends each year, totalling Rs 6.7 bn.
At the current price of Rs 60, the company has a dividend yield of 3%. So far in FY25, the company has already declared two dividends of Rs 0.8 and Re 1 per share.
The company has a strong return on equity (ROE) of 36.9% and has maintained a high dividend payout of almost 100% in recent years.
Although it trades at 8.3 times its book value, the company remains virtually debt-free and has shown steady profitability growth.
Despite a fall in overall demand for the popular destination Goa, the Caravela Beach Resort has been able to maintain a steady growth in all parameters. The property hosted 45 weddings in FY24, an all-time high in the wedding business.
Advani Hotels continues to capitalise on the growing domestic travel market, with a focus on enhancing guest experiences and expanding its service offerings.
Moving ahead, the hotel has a 200 million project in the pipeline for the construction of a banquet hall facility of approximately 22,000 square feet of which the banquet hall itself will be approximately 7,500 square feet plus an adjoining swimming pool, porte cochere, and function lawn.
Source: Equitymaster
Jagran Prakashan
Next on the list is Jagran Prakashan.
Jagran Prakashan is a well-established media conglomerate in India, best known for its flagship newspaper Dainik Jagran, one of the country’s most widely read dailies.
Over the years, the company has expanded beyond print into radio, digital platforms, and outdoor advertising, creating multiple revenue streams.
In a move to strengthen its digital presence, its subsidiary Jagran New Media is set to launch a buyer application on ONDC (Open Network for Digital Commerce), targeting e-commerce growth in Tier II and III cities.
Additionally, the company has migrated its digital platforms to Google Cloud, ensuring a seamless, scalable experience for its growing audience.
Coming to dividends, Jagran Prakashan has maintained a decent dividend track record. It started paying dividends after a break in 2023 and has increased payout in 2024.
The company’s current dividend yield stands at 7.04%.
Financially, Jagran is on a growth trajectory, with the market expecting earnings growth of 16% and revenue growth of 10%.
To stay ahead in the evolving media landscape, Jagran New Media has expanded its digital portfolio to include nine content-driven platforms covering news, education, entertainment, lifestyle, and health.
Source: Equitymaster
Vardhman Acrylics
Vardhman Acrylics Ltd, a subsidiary of Vardhman Textiles Ltd, is a leading manufacturer of acrylic fiber and tow under the Varlan brand, catering to industries such as yarn, blankets, sweaters, upholstery, and carpets.
The company holds a dominant position in India’s acrylic fiber industry, benefiting from strong operational support and efficient cost management.
Despite facing a 29.1% decline in revenue in FY24 due to weak demand, it has maintained a high dividend payout of almost 100% and is trading at a dividend yield of 4.43%.
It has paid dividends consistently for the past three years, which also includes the highest ever payout of Rs 25 per share in FY22.
While the acrylic fiber industry has faced headwinds, global demand is projected to grow at a CAGR of 3.4%, creating future opportunities for expansion.
Vardhman Acrylics continues to focus on operational efficiency and market diversification to navigate challenges.
While short-term stock performance may remain volatile, Vardhman Acrylics’ debt-free status, stable cash flows, and strong backing from its parent company position it well for sustainable dividends and long-term growth in a recovering market.
Source: Equitymaster
Jamna Auto Industries
Jamna Auto Industries Ltd, established in 1965, is India’s largest manufacturer of suspension solutions for commercial vehicles, holding a dominant market share of approximately 62-65% in the domestic sector.
The company offers a diverse product range, including leaf springs, parabolic springs, air suspensions, and lift axles, catering to major Original Equipment Manufacturers (OEMs).
Its manufacturing facilities are spread across 11 locations.
The company’s primary segment – the leaf spring – drives close to 90% of sales, followed by other products such as lift axles, air suspensions and stabiliser bars.
Coming to dividends, Jamna Auto has paid consistent dividends for the 15 years. It has increased payouts in recent years.
For FY24, it paid Rs 2.4 per share as dividends, compared to Rs 1.9 in FY23 and 1.5 in FY22 and Rs 0.75 in FY21.
For FY25, Jamna Auto has already paid Re 1 per share as dividends in November 2024.
Jamna Auto’s strategic focus on expanding its aftermarket services and export markets positions it well to capitalize on the anticipated growth in the commercial vehicle industry.
Given Jamna Auto’s healthy relationship with its clients, the company derives consistent business from leading OEMs including Tata Motors, Daimler India, Volvo Commercial Vehicles, among others.
Source: Equitymaster
NHPC
NHPC, India’s premier hydropower generation company, is actively expanding its renewable energy portfolio to align with the nation’s clean energy goals.
As the government of India’s flagship hydroelectric power company, NHPC is engaged in power generation and bulk supply to various utilities.
It also provides project management, construction contracts, consultancy services, and power trading services. The company generated 15,013 million units of electricity in H1FY25, showcasing its operational scale.
In December 2024, NHPC announced a significant investment of Rs 55 billion to develop a 1,000 MW solar power project in Bihar.
NHPC’s shares are currently quoting at Rs 79, reflecting a dividend yield of 2.5%. The company has declared 26 dividends since 2010.
For FY24, NHPC declared a dividend of Rs 1.9 per share, translating to a 2.4% payout.
For the current financial year FY25, NHPC has already declared an interim dividend of Rs 1.4 per share.
Looking ahead, industry experts project robust growth for NHPC, driven by the commissioning of large-scale hydroelectric projects like Dibang and Teesta-VI, slated for completion by 2032 and 2027, respectively.
Additionally, NHPC is exploring strategic investments, including a potential stake in PTC India, to enhance its market presence.
NHPC is prioritising the development of pumped storage projects across multiple states, including Rajasthan, Odisha, and Maharashtra. Pre-feasibility studies are underway, focusing on large-scale energy storage solutions to enhance renewable energy integration.
Source: Equitymaster
Snapshot of High Dividend Yield Penny Stocks
Here’s a table showing some more penny stocks with high yields.
Date Source: Equitymaster
Conclusion
Investing in high-dividend-yield penny stocks can be an effective way to generate passive income while tapping into the growth potential of smaller companies.
The stocks highlighted in this article stand out for their consistent dividends, strong business models, and future growth prospects.
While they offer a blend of stability and income, it is important to consider the risks associated with penny stocks, including market volatility and liquidity concerns.
Investors should focus on companies with a strong track record of dividend payouts, manageable debt levels, and solid growth potential to maximize returns.
And before making any judgments, investors should consider the fundamentals, growth plans, and corporate governance practices of the company.
Happy Investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here…
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