4 Largecap Dividend Stocks With Yield of 1-2 Per Cent to Watch for Future Multibagger Potential: SBI, L&T, LIC and M&M
- October 23, 2026
- Posted by: Manan Bisht
- Category: Best Stocks
SBI Rs 970. L&T Rs 3,638.30. LIC Rs 387.50. M&M Rs 2,864.10. Market caps from Rs 3.48 lakh crore to Rs 8.81 lakh crore. Data as of 21 Oct 2026.
Quick Answer
SBI, L&T, LIC and M&M are the 4 picks in this dividend stocks with yield of 1-2 per cent watchlist, with market caps between Rs 3.48 lakh crore and Rs 8.81 lakh crore. SBI stands out for the largest market cap at Rs 8,80,754 crore, while L&T offers 12.23% revenue growth in FY26. PE ratios run from 8.30 to 25.49, so compare each one with its industry PE before investing. All figures are as of 21 October 2026.
Dividend stocks with yield of 1-2 per cent to watch for multibagger potential start with a simple filter: size, a clean financial record and earnings that keep growing. SBI, L&T, LIC and M&M meet that test, with market caps from Rs 3.48 lakh crore to Rs 8.81 lakh crore and SBI offering the largest market cap at Rs 8,80,754 crore. Each of these companies has a dividend yield between 1 and 2 per cent, and net profit rose in FY26 and in the latest quarter.
This list covers companies with a dividend yield between 1 and 2 per cent, rising profit in FY26 and the latest quarter, market capitalisation above Rs 1,00,000 crore, and complete, verifiable financials, ranked by market capitalisation. Each company has a market cap above Rs 1 lakh crore. Investors screening dividend stocks with yield of 1-2 per cent usually begin with size and balance sheet strength, and this list follows the same logic. All figures are as of 21 October 2026 and are drawn from NSE and BSE data and company filings.
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What Are Dividend Stocks With Yield of 1-2 Per Cent and Why Do They Attract Multibagger Interest?
Dividend stocks with yield of 1-2 per cent are shares that pay a steady dividend while reinvesting most of their profit for growth. The four here cover public sector banking, engineering and construction, insurance and automobiles.
A modest dividend with a growing business balances income and growth. For dividend stocks with yield of 1-2 per cent, rising profit adds to the case. For dividend stocks with yield of 1-2 per cent, checking each result against the latest quarter matters more than any single ratio. The next sections explain what stands out in each of dividend stocks with yield of 1-2 per cent, using FY26 and latest quarter data. Prices move daily, so recheck the figures for dividend stocks with yield of 1-2 per cent before you decide.
Dividend Stocks With Yield of 1-2 Per Cent at a Glance: Price, Market Cap, PE, ROE and Price to Book
Prices are closing prices as of 21 October 2026. LIC combines the lowest PE of the group, 8.30, with the highest return on equity, 32.53%.
| Stock | CMP (Rs) | Market Cap (Rs Cr) | PE | Industry PE | ROE | Price to Book | 52-Week Range (Rs) |
|---|---|---|---|---|---|---|---|
| State Bank of India | 970 | 8,80,754 | 9.82 | 12.05 | 14.29% | 1.50 | 877.05 to 1,234.70 |
| Larsen & Toubro | 3,638.30 | 5,00,275 | 25.49 | 22.89 | 14.72% | 4.58 | 3,288.10 to 4,440.00 |
| Life Insurance Corporation of India | 387.50 | 4,98,410 | 8.30 | 10.47 | 32.53% | 2.81 | 360.75 to 468.48 |
| Mahindra & Mahindra | 2,864.10 | 3,48,064 | 17.19 | 23.82 | 18.37% | 3.74 | 2,744.30 to 3,839.90 |
SBI: 23.72% Profit CAGR Since FY22
State Bank of India is the country’s largest lender, with a branch network that reaches every part of India. It reported FY26 total income of Rs 7,12,643.53 crore, up 7.43% year on year, and net profit of Rs 85,168.47 crore, up 7.78%. Net profit has compounded at 23.72% a year since FY22, while total income has grown 15.03% a year.
In the June 2026 quarter, total income rose 7.83% to Rs 1,80,061.86 crore and net profit grew 13.65% to Rs 24,579.04 crore. The share price has gained 92.86% over five years. Foreign investors raised their holding from 9.98% in July 2025 to 10.81% in June 2026. The stock trades at a PE of 9.82 against an industry PE of 12.05, below the sector average, with a return on equity of 14.29%. The dividend yield is 1.82%.
L&T: Five-Year Gain of 104.68%
Larsen & Toubro is the largest engineering and construction company in India, with additional businesses in IT services and infrastructure projects. It reported FY26 revenue of Rs 2,91,635.04 crore, up 12.23% year on year, and net profit of Rs 19,159.40 crore, up 8.32%. Net profit has compounded at 16.81% a year since FY22, while revenue has grown 16.41% a year. Operating margin was 14.13% in FY26.
The stock trades at a PE of 25.49 against an industry PE of 22.89, with a return on equity of 14.72%. In the June 2026 quarter, revenue rose 8.12% to Rs 70,318.47 crore and net profit grew 15.20% to Rs 4,982.85 crore. The share price has gained 104.68% over five years.
LIC: 93.19% Profit CAGR Since FY22
LIC is India’s largest life insurer and one of the biggest institutional investors in the stock market, with a vast agent network across the country. It reported FY26 revenue of Rs 9,90,211.25 crore, up 10.23% year on year, and net profit of Rs 57,453.15 crore, up 18.90%. Net profit has compounded at 93.19% a year since FY22, while revenue has grown 7.96% a year. Operating margin was 5.51% in FY26. The debt-to-equity ratio is 0.00, which keeps interest costs low.
In the June 2026 quarter, revenue rose 6.97% to Rs 2,41,166.45 crore and net profit grew 23.98% to Rs 13,584.25 crore. Domestic institutions raised their holding from 1.36% in September 2025 to 6.17% in September 2026. The stock trades at a PE of 8.30 against an industry PE of 10.47, below the sector average, with a return on equity of 32.53%.
M&M: 26.58% Profit CAGR Since FY22
Mahindra & Mahindra is one of the largest SUV makers in India and the country’s largest tractor maker, with financial services and electric vehicles in its portfolio. It reported FY26 revenue of Rs 2,02,084.34 crore, up 25.21% year on year, and net profit of Rs 18,621.71 crore, up 32.32%. Net profit has compounded at 26.58% a year since FY22, while revenue has grown 22.04% a year. Operating margin was 21.19% in FY26.
The stock trades at a PE of 17.19 against an industry PE of 23.82, below the sector average, with a return on equity of 18.37%. In the June 2026 quarter, revenue rose 27.47% to Rs 59,203.60 crore and net profit grew 37.04% to Rs 5,997.56 crore. The share price has gained 220.52% over five years. Domestic institutions raised their holding from 29.59% in June 2025 to 32.65% in June 2026.
Dividend Stocks With Yield of 1-2 Per Cent: Financial Comparison on Growth and Margins
The table compares scale and growth across these dividend stocks with yield of 1-2 per cent. Latest quarter means the most recent reported quarter for each company, and only metrics that are positive for every company are shown.
| Stock | Total Income (Rs Cr) | Net Profit (Rs Cr) | Income Growth (YoY) | 4-Year Income CAGR | 4-Year Net Profit CAGR |
|---|---|---|---|---|---|
| SBI | 7,12,643.53 | 85,168.47 | 7.43% | 15.03% | 23.72% |
| L&T | 2,91,635.04 | 19,159.40 | 12.23% | 16.41% | 16.81% |
| LIC | 9,90,211.25 | 57,453.15 | 10.23% | 7.96% | 93.19% |
| M&M | 2,02,084.34 | 18,621.71 | 25.21% | 22.04% | 26.58% |
Check the Univest Screener for live data on these dividend stocks with yield of 1-2 per cent
Institutional Holding in SBI, L&T, LIC and M&M
Institutional holding shows who is backing these dividend stocks with yield of 1-2 per cent alongside the promoter. The table uses the latest reported quarter for each. M&M has the deepest institutional backing, with FII and DII together holding 67.54% as of June 2026. Domestic institutions increased their holding over the past year in LIC (from 1.36% to 6.17%) and M&M (from 29.59% to 32.65%).
| Stock | Promoter | FII | DII | Public | Quarter |
|---|---|---|---|---|---|
| SBI | 55.47% | 10.81% | 26.64% | 7.08% | June 2026 |
| L&T | Nil | 19.13% | 43.02% | 37.85% | June 2026 |
| LIC | 90.00% | 1.55% | 6.17% | 2.28% | September 2026 |
| M&M | 18.45% | 34.89% | 32.65% | 14.01% | June 2026 |
Risks to Weigh in Dividend Stocks With Yield of 1-2 Per Cent
Being careful with dividend stocks with yield of 1-2 per cent means looking at what can slow the story as well as what can speed it up. Four points matter most:
- Past growth may not repeat.
- Share prices can move sharply in either direction.
- Valuation: L&T trades at a PE of 25.49 against an industry PE of 22.89, so earnings need to keep growing to support the price.
- Concentration: Holding all 4 names puts the allocation in one sector, so size each position to match your risk appetite.
How to Choose Between Dividend Stocks With Yield of 1-2 Per Cent
Picking from dividend stocks with yield of 1-2 per cent comes down to four checks, applied in order.
- Check asset quality and net interest margin first, then return on equity and price to book. Debt-to-equity does not apply to lenders.
- Compare each PE with the industry PE (10.47 to 23.82) and ask whether the growth rate justifies any gap.
- Track net profit growth, the operating margin and the return on equity in every quarterly result.
- Stagger entries across quarters and review institutional holding every reporting season.
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Conclusion
Among dividend stocks with yield of 1-2 per cent, SBI stands out for the largest market cap at Rs 8,80,754 crore, L&T for 12.23% revenue growth in FY26, LIC for the highest return on equity at 32.53% and M&M for the biggest five-year price gain at 220.52%. Which one suits a portfolio depends on how much valuation risk it can carry, so staggering entries and reviewing each quarterly result is a sound habit. Investors comparing dividend stocks with yield of 1-2 per cent should rank them on growth, financial strength and the price paid, and anyone who wants personalised guidance can consult a SEBI-registered advisor before acting.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions on Dividend Stocks With Yield of 1-2 Per Cent to Watch
Which are the best dividend stocks with yield of 1-2 per cent to watch for multibagger potential?
Ans. SBI, L&T, LIC and M&M are the 4 names this list highlights, with market caps of Rs 8,80,754 crore, Rs 5,00,275 crore, Rs 4,98,410 crore and Rs 3,48,064 crore respectively. SBI is notable for the largest market cap at Rs 8,80,754 crore. L&T stands out for 12.23% revenue growth in FY26. LIC offers the highest return on equity at 32.53%. M&M brings the biggest five-year price gain at 220.52%. These are watchlist names for dividend stocks with yield of 1-2 per cent, not recommendations, so match each one to your own risk profile and time horizon.
Is LIC a good stock for long-term investors?
Ans. LIC has a return on equity of 32.53%, a PE of 8.30 against an industry PE of 10.47 and a market cap of Rs 4,98,410 crore. Net profit has compounded at 93.19% a year since FY22, and FY26 revenue rose 10.23% while June 2026 quarter net profit grew 23.98%. Long-term returns in dividend stocks with yield of 1-2 per cent depend on earnings growth and the price paid at entry, so staggering purchases and consulting a SEBI-registered advisor is sensible.
Can M&M become a multibagger from here?
Ans. M&M has already gained 220.52% in five years, so another multi-fold move would need sustained earnings growth. A multibagger outcome in dividend stocks with yield of 1-2 per cent requires earnings to keep growing faster than the market for several years. Net profit has compounded at 26.58% a year since FY22, and FY26 revenue rose 25.21%. At a PE of 17.19 against an industry PE of 23.82, valuation should be checked against that growth before investing.
What is the market cap of SBI, L&T, LIC and M&M?
Ans. As of 21 October 2026, SBI has a market cap of Rs 8,80,754 crore, L&T has a market cap of Rs 5,00,275 crore, LIC has a market cap of Rs 4,98,410 crore and M&M has a market cap of Rs 3,48,064 crore. All of them qualify as largecaps. Market cap changes daily with the share price, so check the latest figure on the Univest Screener or on NSE before taking a decision on dividend stocks with yield of 1-2 per cent.
What are the risks of investing in dividend stocks with yield of 1-2 per cent?
Ans. The main risks are market swings, slower growth than expected and valuations that already reflect good news. Companies with strong balance sheets and steady earnings handle these better. L&T trades at a PE of 25.49 against an industry PE of 22.89, so earnings growth needs to hold up.
Is LIC trading below its industry PE?
Ans. LIC trades at a PE of 8.30 against an industry PE of 10.47. A lower PE means investors pay less for each rupee of earnings, but it should be read with growth (net profit has compounded at 93.19% a year since FY22 and FY26 revenue rose 10.23%) and balance sheet strength before drawing a conclusion.
How much do institutions hold in SBI, L&T, LIC and M&M?
Ans. As of the latest reported quarter, FII and DII together hold 37.45% of SBI (10.81% and 26.64%), 62.15% of L&T (19.13% and 43.02%), 7.72% of LIC (1.55% and 6.17%) and 67.54% of M&M (34.89% and 32.65%). Rising institutional holding is a useful signal in dividend stocks with yield of 1-2 per cent, though it should be read with earnings trends rather than on its own.
