The performance of consumer cyclical companies is heavily dependent on the economic cycle. Businesses such as Morarjee Textiles and Pearl Global Industries offer products that are considered luxury items, rather than those of absolute necessity, for example gambling and day spas. During times of growth, consumers tend to make more discretionary purchases which will drive these companies’ profitability. Higher profits by and large lead to higher dividend payout so economic growth is an opportune time to benefit from these consumer stocks. Here are my top dividend stocks in the consumer cyclical industry that could be valuable additions to your current holdings.
Morarjee Textiles Limited (BSE:532621)
532621 has a nice dividend yield of 3.08% and has a payout ratio of 36.46% . While the yield has dropped at times in the last 10 years, dividends per share during this time have increased overall from ₹0 to ₹1.40. It should comfort potential investors that the company isn’t expensive when we look at its PE ratio compared to the IN Luxury industry. Morarjee Textiles’s PE ratio is 11.8 while its industry average is 17.7. Continue research on Morarjee Textiles here.
Pearl Global Industries Limited (BSE:532808)
532808 has a decent dividend yield of 2.48% and has a payout ratio of 20.78% . Although there has been some volatility in the company’s dividend yield, the DPS over a 10 year period has increased from ₹1.50 to ₹3.00. More detail on Pearl Global Industries here.
RSWM Limited (BSE:500350)
500350 has a decent dividend yield of 3.74% and is paying out 27.98% of profits as dividends . Despite there being some hiccups, dividends per share have increased during the past 10 years. Comparing RSWM’s PE ratio against the IN Luxury industry draws favorable results, with the company’s PE of 7.5 being below that of its industry (17.7). Continue research on RSWM here.
For more solid dividend paying companies to add to your portfolio, explore this interactive list of top dividend payers.