09 March 2011

Expected Dividend Yield : ICICI Securities

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High dividend yield stocks offer a safe haven to investors where safety has greater priority compared to high returns.
Hence, even if the market remains volatile, going ahead, an investor can still get a decent return on investment, thanks to
good dividend yielding stocks. The dividends are paid no matter what direction the stocks move and can provide a higher
yield on investment in a weak market.

We have short-listed companies that would provide a decent dividend yield in the near future. For this purpose, we have
filtered companies that have had at least 75% of FY10 profits in the nine months ended December 2010 and assumed that
the companies would maintain their FY10 dividend payout ratio. We have forecasted the FY11E PAT by taking the actual
PAT of nine months ended December 2010 and assumed Q4FY11 as an average of last three quarters net profit. Based on
the FY11E net profit and FY10 payout ratio, we have calculated the dividend percent for FY11E. Finally, we have deducted
the interim dividends already paid in FY11 to arrive at the expected final dividend and dividend yield.

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