Highest Dividend-Yielding Stocks in India
| Company | Market Cap (₹ Cr) | P/E |
Dividend Yield %
|
| Taparia Tools Ltd | 27 | 0.23 | 220.87 % BlinkX |
| Multibase India Ltd | 361 | 24.86 | 18.06 % BlinkX |
| MSTC Ltd | 3,521.00 | 8.43 | 7.73 % BlinkX |
| Jagran Prakashan Ltd | 1,524.00 | 8.99 | 6.86 % BlinkX |
| Coal India Ltd | 241,579.00 | 7.02 | 6.50 % BlinkX |
| D B Corp Ltd | 4,221.00 | 9.57 | 5.40 % BlinkX |
| Gujarat Pipavav Port Ltd | 6,713.00 | 19.15 | 5.17 % BlinkX |
| Standard Industries Ltd | 128 | 141.79 | 5.25 % BlinkX |
| VST Industries Ltd | 4,652.00 | 14.29 | 4.69 % BlinkX |
| Mawana Sugars Ltd | 339 | 3.57 | 4.39 % BlinkX |
Top Dividend-Yielding Large-Cap Stocks
For investors seeking more stable, blue-chip payers, here are five leading government- or quasi-government companies known for consistent dividends:
- Coal India Ltd (Coal mining) – Dividend Yield ~ 8.5 % Almondz Trade
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Power Finance Corporation (PFC) (Power sector financing) – Yield ~ 7.8 % Almondz Trade
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Hindustan Zinc Ltd (Metals & mining) – Yield ~ 7.5 % Almondz Trade
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REC Ltd (Power sector finance) – Yield ~ 7.2 % Almondz Trade
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Oil and Natural Gas Corporation (ONGC) (Oil & gas) – Yield ~ 6.8 %
Key Considerations for Dividend Investors
Dividend Sustainability: Extremely high yields (e.g., > 50 %) often come from companies with depressed share prices or one-off special payouts; verify payout ratios and cash flows.
Sector Risk: Commodities and mining (like Coal India, Hindustan Zinc) can be cyclical; financial enterprises (PFC, REC) hinge on interest‐rate and credit cycles.
Tax Implications: Dividends in India are taxable in the hands of the investor; consider tax efficiency relative to other investment vehicles (e.g., MFs, REITs).
Total Return: Dividend yield is only part of total returns. Factor in potential share-price appreciation or depreciation.
Corporate Governance: Check board decisions on dividend policy, cash reserves, and capital‐expenditure plans to gauge future payouts.
how to invest in dividend stocks
Investing in dividend stocks in India involves a few key steps. Here is a guide on how to approach it:
1. Open a Demat and Trading Account:
- To buy or sell any stocks in India, you need both a Demat account and a trading account.
- A Demat account (Dematerialized Account) holds your shares in an electronic format.
- A Trading account is what you use to place buy and sell orders in the stock market.
- You can open these accounts with a brokerage firm registered with the Securities and Exchange Board of India (SEBI). There are many options available, including full-service brokers and discount brokers.
2. Understand Your Investment Goals and Risk Tolerance:
- Before investing, define what you want to achieve. Are you looking for regular income, long-term wealth creation, or a mix of both?
- Assess your risk tolerance. While dividend stocks are generally considered less volatile than growth stocks, they still carry market risks.
3. Research and Identify Potential Dividend Stocks:
- Look for companies with a consistent history of paying dividends. A long track record can indicate financial stability.
- Analyze the company’s financials:
- Profitability: Healthy profits are essential for sustainable dividend payouts.
- Dividend Payout Ratio: Check what percentage of profits is distributed as dividends. A very high ratio might be unsustainable, while a very low one might mean the company prioritizes reinvestment over dividends.
- Free Cash Flow: This indicates the cash available after operational expenses, which can be used for dividends.
- Debt Levels: Lower debt generally suggests better financial health and ability to pay dividends.
- Consider the company’s future prospects and the industry it belongs to.
- Look at metrics like Dividend Yield (dividend per share divided by the stock price) to understand the income potential relative to the current price.7 However, don’t solely rely on a high yield, as it could sometimes indicate a falling stock price.
4. Choose a Strategy:
- Income Investing: Focus on stocks with a high dividend yield for regular income.
- Dividend Growth Investing: Look for companies that consistently increase their dividend payouts over time, indicating strong underlying business growth.
- Total Return: Consider both dividend income and potential capital appreciation.
5. Place Your Buy Order:
- Once you have chosen the stocks you want to invest in, log in to your trading account.
- Place a buy order for the desired number of shares. You can typically choose between a market order (buy at the current market price) or a limit order (buy at a specific price).
6. Consider Dividend Reinvestment Plans (DRIPs):
- Some companies offer DRIPs, allowing you to automatically reinvest your cash dividends back into buying more shares of the same company. This can help you benefit from compounding.
7. Monitor Your Investments:
- Keep track of the performance of the stocks you’ve invested in.
- Stay informed about the company’s financial results, news, and any changes in their dividend policy.
- Periodically review your portfolio to ensure it still aligns with your investment goals and risk tolerance.
Important Considerations for Indian Investors:
- Taxation of Dividends: Dividends received by shareholders are taxable in India based on their income tax slab.
- Market Volatility: While dividend stocks offer some stability, they are not immune to market fluctuations.
- Company Announcements: Pay attention to dividend announcements, record dates (determining eligibility for dividends), and payment dates.
Investing in dividend stocks can be a rewarding strategy for building wealth and generating income over time. By following these steps and conducting thorough research, you can make informed investment decisions in the Indian market.
