3 Small Cap Debt Free Stocks That Have A Dividend Yield Upto 2.2%, With More Than 50% Profits In 3 Years

There are three companies we have identified, using the screener, that are debt-free and have given profits of more than 50% in last three years. A debt-free company with consistent growth shows the persistence of a company's performance over the years.

A debt-free company has a zero debt-to-equity ratio, which indicates the level of risk associated with a company's financial structure and management. So, investing in debt-free companies is attractive as these companies are not saddled with higher financing expenses when the interest rates are raised, thus keeping a lid on their overall costing.

Here are the top 3 benefits of being debt free

• With no debt strings attached, there is no interest repayment burden, thus insulating debt-free companies from changes in the interest rate regime.

• The company likely has strong fundamentals, self-sufficient, and stable to run its operations, thus it can pay higher dividend yields.

• A zero-debt company also indicates, there are no creditors to lay claims over the company's assets. It also provides debt-free companies with the bandwidth to borrow in case of any emergencies.

The three companies are Ksolves India Ltd, Bhansali Engineering Polymers Ltd, and Wendt India Ltd. Each of these companies has even recorded profit growth of nearly 233.58% over three years. The details of each are given below.

1. Ksolves India Ltd
Ksolves India Ltd was incorporated in 2014 as a small-cap IT company. It is engaged in software development, enterprise solutions, consulting & providing IT solutions to various companies across sectors such as Real Estate, E-commerce, Finance, Telecom Healthcare, etc.

Ksolves curates & develops the best possible software solutions. It is servicing clients across several countries with 410+ in-house technology experts. In the last three years, this small-cap debt-free company has delivered a healthy growth profit of 233.58%.

It has a market capitalisation of Rs 1,081.86 crore and its stock closed at Rs 912.50 in yesterday's trade. The last closing price rallied by 14.61% on an intraday basis and its dividend yield is 1.75%.

2. Bhansali Engineering Polymers Ltd
Bhansali Engineering is a small cap company incorporated in 1984 as a manufacturer of international quality chemicals, acrylonitrile butadiene styrene (ABS) and styrenics resins. The company has a market capitalisation of Rs 2,257.98 crore, with a debt-free balance sheet and last three years' profit of 96.08%.

The company's latest stock price closed at Rs 136 per share, it was up by 3.89% on an intraday basis. Its dividend yield is 2.20%.

3. Wendt India Ltd
Wendt is a leading manufacturer of super abrasives, machining tools and precision components. Incorporated in 1980, the company is a joint venture between 3M (via Wendt GmbH) and Carborundum Universal (Murugappa Group). Both companies hold 37.5% shares in the company.

This small cap company is debt free, has a market capitalisation of Rs 1,838.23 crore and has posted a profit of 64.90% in the last three years.

Its dividend yield at the current share price of Rs 9,191.15 results in 0.87%. The current market price has risen by 1.22% over the previous day's closing.

Important thing about dividends in this article

We could have factored in special dividends and one-off dividends. Such companies may be included in the list. Sometimes companies tend to declare huge dividends on account of the sale of an asset. Apart from this another important thing to remember is that dividends would not be consistent or the same every year. So, we have not factored that as well in our current write-up.

Disclaimer
Please note, that the above-mentioned stocks' information about profit and debt should be as treated informational and not an advisory to investing. These should not be construed as recommendations to either hold, buy, or sell in the stocks listed above. The article is just information and we have not done a detailed fundamental analysis. Therefore, caution is exercised and neither the author nor Greynium Information Technologies should be held responsible for losses based on a decision from the article.