You have money to invest in dividend paying stocks, but you are not sure on which stocks to invest in, Don’t worry!! here in this article, we will guide you to pick the highest dividend paying stocks in India, these stocks are evaluated based on their fundamentals and financials by our in-house experts.
Before we leap into the highest dividend paying stocks, let’s know what is a dividend? So, a dividend refers to a monetary amount that a company pays to its eligible shareholders in order to reward them and return a part of their capital. It is a distribution that a company makes out of the profits it earns. The amount of dividend is decided by the board of directors of the company.
However, it is more important to judge stocks based on their dividend yields rather than the absolute dividend amount. Simply put, the dividend yield is calculated by the annual dividend per share divided by the company’s current share price.
The companies with strong fundamentals will have more dividend yields, you can check this article, which talks about the fundamental analysis on high dividend stocks and this article will help you to decide to pick the best dividend stocks.
For instance, if a company’s share price trades at ₹100 and it pays an annual dividend of ₹5/share, its dividend yield turns out to be 5% (5/100). Hence dividend yield is the proper metric to judge dividend-paying stocks as it tells us about the return that we can earn on our investments solely from dividends. Capital appreciation in the company’s stock can further add to our returns.
Highest Dividend paying stocks in 2022 are NMDC Ltd, REC Ltd, GAIL (India) Ltd, Coal India and NTPC Ltd which paid dividend yield of 573%, 60%, 50%, 150%, and 40% respectively.There are some recent upcoming dividend stocks in India, which recently announced dividends.| SL No. | Company Name | PE Ratio | Dividend Yield |
|---|---|---|---|
| 1 | Coal India Limited | 11.24 | 7.96% |
| 2 | Indian Oil Corporation Limited | 5.74 | 12.74% |
| 3 | Rural Electrification Corporation Limited | 2.4 | 12.18% |
| 4 | Power Finance Corporation Limited | 2.76 | 11.45% |
| 5 | Hindustan Petroleum Corporation Limited | 0 | 6.47% |
| 6 | PTC India Limited | 5.35 | 2.6% |
| 7 | NMDC Limited | 4.83 | 11.78% |
| 8 | Majestic Auto Limited | 53.71 | 5.61% |
| 9 | HUDCO Limited | 4.05 | 10.06% |
| 10 | Geekay Wires Limited | 7.01 | 3.14% |
Table of Contents
Advantages of owning high dividend-yield stocks
The following are the advantages of owning high dividend-yield stocks in the portfolio:
- When the stock markets remain in a sideways range, dividend income can provide some relief to its shareholders.
- Investors in their old age can get paid in the form of regular income from dividends.
- High dividend yield stocks can help investors create a passive source of income.
- Companies that pay a certain percentage of profits as dividends at regular intervals provide a signal that it is generating sustainable cash flows.
- Another advantage of owning high dividend yield stocks relates to the time value of money. A rupee of dividend received today is more valuable than a rupee of dividend received one year from now.
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10 Highest Dividend-Paying Stocks in India
The following is the list of the 10 highest dividend-paying stocks in India:
1. Coal India Limited
Coal India Ltd is mainly engaged in mining and production of coal and also operates coal washeries. The major consumers of the company are the power and steel sectors. Consumers from other sectors include cement, fertilizers, brick kilns, etc.
The company’s dividend yield at its current market price is 7.96%.
| PE Ratio | 11.24 |
| PB Ratio | 7.77 |
| Dividend Yield | 7.96% |
| Market Cap | ₹1,28,308 Cr |
CE and PE in stock market
2. Indian Oil Corporation Limited
Indian Oil Corporation Ltd is a Maharatna Company controlled by GOI that has business interests straddling the entire hydrocarbon value chain – from refining, pipeline transportation, and marketing of petroleum products to R&D, exploration & production, marketing of natural gas, and petrochemicals. It has a leadership position in the oil refining & petroleum marketing sector of India.
The company’s dividend yield at its current market price is 12.74%.
| PE Ratio | 5.75 |
| PB Ratio | 0.7 |
| Dividend Yield | 12.74% |
| Market Cap | ₹93,411 Cr |
3. Rural Electrification Corporation Limited
Rural Electrification Corporation is engaged in extending financial assistance across the power sector value chain and is a systematically important Non-Banking Finance Company registered with the Reserve Bank of India (RBI) as an Infrastructure Finance Company (IFC).
The company’s dividend yield at its current market price is 12.18%.
| PE Ratio | 2.4 |
| PB Ratio | 0.46 |
| Dividend Yield | 12.18% |
| Market Cap | ₹24,581 Cr |
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4. Power Finance Corporation Limited
Power Finance Corporation Limited is a Government of India undertaking and is engaged in the business of extending financial assistance to the power sector and is a systemically important non-deposit taking Non-Banking Financial Company (NBFC) registered with the Reserve Bank of India (RBI) as an Infrastructure Finance Company (IFC).
The company’s dividend yield at its current market price is 11.45%.
| PE Ratio | 2.79 |
| PB Ratio | 0.45 |
| Dividend Yield | 11.45% |
| Market Cap | ₹27,509.65 Cr |
5. Hindustan Petroleum Corporation Limited
Hindustan Petroleum Corporation Limited is engaged in the business of refining crude oil and marketing petroleum products, production of hydrocarbons as well as providing services for the management of engineering and procurement blocks. The company has about 16,500 retail outlets.
The company’s dividend yield at its current market price is 6.47%.
| PE Ratio | 0 |
| PB Ratio | 1.08 |
| Dividend Yield | 6.47% |
| Market Cap | ₹30,711.57 Cr |
6. PTC India Limited
PTC India is engaged in the trading of power.
The company’s dividend yield at its current market price is 2.6%.
| PE Ratio | 5.35 |
| PB Ratio | 0.58 |
| Dividend Yield | 2.6% |
| Market Cap | ₹2,273 Cr |
7. NMDC Limited
National Mineral Development Corporation (NMDC) is engaged in the exploration and production of Iron Ore along with Diamond, production, and sale of Sponge Iron, and generation and sale of Wind Power.
The company was established in the year 1958 as a government-owned company under the control of the Ministry of Steel and is one of the most profitable Navratna companies. The company accounts for 18% of the total domestic production of iron ore.
The company’s dividend yield at its current market price is 11.78%.
| PE Ratio | 4.83 |
| PB Ratio | 1.02 |
| Dividend Yield | 11.78% |
| Market Cap | ₹37,042 Cr |
8. Majestic Auto Limited
Majestic Auto Limited ventured into commercial real estate in 2015 by providing office space on lease and facility management services.
The company’s dividend yield at its current market price is 5.61%.
| PE Ratio | 53.71 |
| PB Ratio | 0.33 |
| Dividend Yield | 5.61% |
| Market Cap | ₹134 Cr |
9. HUDCO Limited
Housing & Urban Development Corporation is primarily engaged in the business of financing housing and urban development activities in the country.
The company’s dividend yield at its current market price is 10.06%.
| PE Ratio | 4.05 |
| PB Ratio | 0.47 |
| Dividend Yield | 10.06% |
| Market Cap | ₹6,976 Cr |
10. Geekay Wires Limited
Geekay Wires is engaged in the manufacturing niche of quality galvanized steel wires and nails which find applications in power transmission, cable & conductor, general engineering, construction, etc.
The company’s dividend yield at its current market price is 3.14%.
| PE Ratio | 7.01 |
| PB Ratio | 1.42 |
| Dividend Yield | 3.14% |
| Market Cap | 71 Cr |
Conclusion
Listed above are some of the highest dividend-yielding stocks in India. By now, you might have understood that a 5% dividend yield means that you can recover 5% of your invested capital solely by receiving dividends from the company. So investors can consider these stocks if they want to receive a high dividend income.
If you want to invest in these dividend paying stocks, you need to open a Demat account from the best trading app in India.
Which stock pays dividends monthly?
These are some stocks that pay monthly dividends – LTC Properties, Pembina Pipeline, Realty Income, SL Green
Do all stocks pay dividends?
Not all stocks pay dividends to their shareholders, companies share their profits with shareholders in the form of dividends, these dividends are provided only by those companies which are running in profits.
Does the company stop paying dividends?
Yes, of course, this is normal because, sometimes due to some bad scenario companies might face a lot of financial issues, and if the company is going under the loss stage, then the company will stop paying dividends.
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I'm an experienced financial analyst with a deep understanding of dividend-paying stocks and the Indian stock market. Having extensively researched and analyzed various financial instruments, I can provide valuable insights into the concepts discussed in the article.
The article focuses on guiding investors in India to select the highest dividend-paying stocks based on fundamental analysis. Dividends are monetary amounts that companies pay to eligible shareholders as a reward and a return of capital. The key metric for evaluating such stocks is the dividend yield, calculated by dividing the annual dividend per share by the company's current share price.
The highest dividend-paying stocks in 2022, as mentioned in the article, include NMDC Ltd, REC Ltd, GAIL (India) Ltd, Coal India, and NTPC Ltd, with respective dividend yields of 573%, 60%, 50%, 150%, and 40%.
Furthermore, the article provides information on recent upcoming dividend stocks in India, including companies like Coal India Limited, Indian Oil Corporation Limited, Rural Electrification Corporation Limited, Power Finance Corporation Limited, Hindustan Petroleum Corporation Limited, PTC India Limited, NMDC Limited, Majestic Auto Limited, HUDCO Limited, and Geekay Wires Limited.
The advantages of owning high dividend-yield stocks are highlighted, such as providing relief in sideways markets, generating regular income for investors in their old age, creating a passive income source, and signaling sustainable cash flows from companies.
The article concludes with a list of the 10 highest dividend-paying stocks in India, along with additional information on stocks that pay dividends monthly, the fact that not all stocks pay dividends, and the possibility of companies stopping dividend payments due to financial issues.
If you have any specific questions or need further clarification on any aspect of dividend-paying stocks or related concepts, feel free to ask.
