Highest Dividend Paying Stocks In India For 2024

In the face of looming recession, seasoned investors are targeting high-quality, consistent dividend-paying stocks in India. These companies have strong financials and a strong cash-generating mechanism, allowing them to pay consistent dividends to their investors. This is a popular way to generate passive income from dividends. It is essential to understand the Dos and Don'ts of investing before investing.  In the recent fiscal year, Indian corporations paid out a record-high dividend of ₹2.2 trillion, representing a 12.1% increase over the previous year. Wealth increase is the primary reason for investing in the stock market, but there are different categories of investors based on their goals, temperaments, knowledge, and experience. A range of investors indicates a wide variety of stocks to select, including sectors, company performance, long-term investment goals, and dividend stocks.
 

 What is a Dividend?

A dividend is a payment made by a firm to its stockholders. You can get a dividend if you hold shares in a firm that pays them. Dividends are typically paid quarterly.

However, not all equities pay dividends. If you wish to invest for dividends, you need explicitly buy dividend stocks. Companies that raise their dividend payouts year after year are often less volatile than the overall market. Dividends also provide consistent income, which can help level out a stock's overall performance.

A dividend is a portion of a company's profit distributed to its shareholders, typically in cash.

Example: On March 17, 2022, XYZ announced its dividend. The ex-date was March 29, 2022, and the dividend was ₹15.50 per share.
 

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What are High Dividend Yield Stocks?

The concept of 'dividend yield' in India refers to the income investors receive relative to the current stock price. Investors seek high dividend-paying stocks with higher yields, as they provide a reliable income stream. They often reinvest to enhance returns or allocate towards long-term goals like retirement. The best dividend stocks are chosen based on consistent dividend payments and steady dividend growth, offering both share price appreciation and regular distributions.

It’s calculated using the formula:

Dividend Yield = (Annual Dividend / Share Price) x 100

List of Highest Paying Dividend Stocks in India -h2 Table

Here is a compiled list of the highest paying dividend stocks in India. Let’s take a look at them before making any further investment:

Disclaimer: All the information mentioned above is accurate as of 26th June 2024. However, it is important to conduct research before making any investment decisions in these stocks. It is crucial to remember dividend yields can change based on stock prices and company performance. High yields might also indicate other factors, so it's important to research thoroughly. Consider factors like company financials, future prospects, and overall market conditions before investing. 
 

Overview of the Top Dividend Paying Stocks in India

Here are the overview of top dividend paying stocks in India:

Coal India Limited

Coal India Limited was incorporated in 1973. It is mainly engaged in the business of mining and production of Coal and also operates Coal washeries. 

• Coal India is almost debt free.
• The company has a good return on equity (ROE) track record of 51.8% in the past 3 years.
• The company reported a consolidated net profit of Rs 8.682.20 crore in Q4FY24.

Indian Oil Corporation Limited 

Indian Oil Corporation Limited is a Maharatna company controlled by the Government of India (GoI) with business interests in the entire hydrocarbon value chain - from Refining, Exploration & production, marketing of natural gas and petrochemicals.

• Indian Oil Corporation has delivered good profit growth of 19.3% CAGR over the last 5 years
• The company has reported a consolidated net profit of Rs 5,149 crore in the fourth quarter financial year 2024.

Oil and Natural Gas Corporation Limited

Oil and Natural Gas Corporation Limited is the largest crude oil and natural gas company in India, contributing around 71% to the Indian domestic production.

• Oil and Natural Gas Corporation is trading at 0.99 times its book value.
• The company has reported a consolidated net profit of Rs 11,526 crore in the quarter ending March 2024.

Power Grid Corporation Limited 

Power Grid Corporation of India Limited was incorporated in 1989. It is a Maharatna CPSU and India’s largest electric power transmission company.

• The company has delivered a sales growth of 5.51% over the past five years.
• The company has reported a consolidated net profit of Rs 4,166.33 crore in the fourth quarter ending March 2024.

NTPC Limited

NTPC (National Thermal Power Corporation) Limited is primarily engaged in the generation and sale of bulk power to state power utilities.

• NTPC has a low return on equity of 12.8% over the last 3 years.
• The company reported a consolidated net profit of Rs 6,490.05 crore in Q4FY24.

Hindustan Zinc Limited

Hindustan Zinc Limited incorporated in 1966, is world’s 2nd largest integrated Zinc producer and now the 3rd largest Silver producer. 

• Hindustan Zinc has reduced debt.
• It has a good return on equity (ROE) track record of 39.2% in the last 3 years.
• The company reported a consolidated net profit of Rs 2,038 crore in Q4FY24.

Bharat Petroleum Corporation Limited

Bharat Petroleum Corporation Limited is a public sector enterprise engaged in the business of refining crude oil and marketing of petroleum products.

• Bharat Petroleum Corporation has reduced debt.
• The company has delivered a good profit growth of 28.2% CAGR over the last 5 years.
• The company has reported a consolidated net profit of Rs 4,789.57 crore in the fourth quarter financial year 2024.

REC Limited

REC Limited is a Central Public Sector Undertaking under the Ministry of Power engaged in financing projects in the complete power sector value chain from generation to distribution. 

• REC has delivered a good profit growth of 19.8% CAGR over last 5 years
• The company has been maintaining a healthy dividend payout of 29.9%
• The company's working capital requirements have reduced from 45.5 days to 33.8 days.
• The company has reported a consolidated net profit of Rs 14,019 crore in the quarter ended March 2024.

NMDC Limited

NMDC Limited is involved in the exploration and production of Iron Ore along with Diamond, production and sale of Sponge Iron and generation and sale of Wind Power.

• NMDC has a good return on equity (ROE) track record of 29% in the last 3 years.
• The company has reported a consolidated net profit of Rs 1,415.62 crore for the March quarter financial year 23-24.

Hindustan Petroleum Corporation Limited 

Hindustan Petroleum Corporation Limited is engaged in the business of refining crude oil and marketing of petroleum products. It also manages production of hydrocarbons along with services for management of E&P Blocks.

• Hindustan Petroleum Corporation has a return on equity of 14.0% over the last 3 years.
• The company reported a consolidated net profit of Rs 2,709.31 crore in January-March - the fourth quarter of the 2023-24 fiscal. 
   

Why Invest in the Highest Dividend Paying Stocks?

Here are some good reasons to invest in above mentioned highest dividend paying stocks:

• Reliable income: Dividend paying stocks may be a steady source of income, which is especially appealing for retirees or those looking for consistent income from their assets.
• Capital appreciation potential: Dividend-paying companies are frequently well-established and financially solid, which can contribute to long-term capital appreciation.
• Protection against inflation: Dividends can help you hedge against inflation by providing a consistent income stream that keeps up with growing costs.
• Stability: Dividend-paying corporations are frequently more stable than non-dividend-paying companies since they have robust cash flows and are less prone to stock price volatility.
• Reinvestment opportunities: Dividends can be reinvested in the firm, compounding your earnings over time. 
   

Factors to be Consider Before Investing in Dividend-paying Stocks

Here are the factors that need to be considered while investing in highest dividend paying stocks:

• Growth Expectations: Dividend stocks may not provide as much growth as certain non-dividend corporations.
• Stable Income: Dividend stocks are perfect for people looking for long-term income from established, stable corporations.
• Goal Setting: Set yearly return targets and select equities with 5% to 15% growth and dividends for a consistent investment strategy.
  
   

Conclusion
To summarise, investing in India's highest dividend yield stocks might be a solid option for investors searching for a consistent income stream. Many corporations pay dividends to shareholders while indicating robust financial development in order to maintain investor interest. Finally, you should install a reputable stock market app to improve your investing opportunities.