Factors to Consider When Investing in PSU Stocks
Weighing the pros and cons of every investment is key to building wealth. Along similar lines, you must weigh the following factors before investing in PSU stocks.
1. Stability
PSU stocks are known to be stable as they are backed by the government.
The government ownership gives you a sense of assurance which makes them a potential investment avenue.
That said, every stock is at the mercy of economic conditions, business metrics, and investor sentiment.
2. Dividend Earnings
PSUs have been consistent in sharing dividends with their shareholders. This makes it more interesting.
If you are looking for a passive income source then these stocks can be an option.
3. Consistent Earnings
Earnings are an important factor to consider while investing in a company.
PSUs who have had good earnings in the last few years have performed well in the markets.
High Dividend Paying PSU Stocks
It has been observed that many of the PSUs reward their investors with dividends regularly.
They believe in sharing their profit with shareholders. Some of the high dividend-paying stocks in PSUs are:
- ONGC
- Coal India
- Oil India
- REC
These companies have given a dividend yield of ~9% in the past 12 months.
That said, you must do your own research before investing in any stock so that you can ensure the investment aligns with your goals, risk profile, and overall portfolio.