Top Highest Dividend Paying Stocks In India (2024)

Most inexperienced investors are drawn to dividend-paying companies because of their track record of consistently outperforming mutual fund investments in terms of annual return. This suggests that you may profit by almost Rs. 15,000 if you invested Rs. 1,00,000 in these stocks, as opposed to an annual interest rate of roughly Rs. 7,000 on a fixed deposit. When investing your hard-earned money in dividend stocks, there are a few important factors to take into account to prevent losing money. 

Let’s examine the Highest dividend paying stocks in India.

1. Rural Electrification Corporation Ltd (REC Ltd)

Market cap	Rs. 30,532.23 Cr.
P/E Ratio	2.95
EPS	Rs. 39.27
Dividend Return (1-year)	15.57%

REC is a financial agency under government ownership that offers loans for the renovation of existing transmission infrastructure, new power plants, and electricity distribution. The firm reports that its Gross Non-Performing Assets (GNPA) percentage was 4.45% on March 31, 2022, a decrease from 4.84% on the same date in 2021. The gross non-performing asset (GNPA) is the total amount of loans disbursed by the financial institution that has fallen into default. Manageable is defined by banks and other financial institutions as having a GNPA of no more than 3%. REC has a rather high GNPA, but because it’s a government initiative, its dividend return may make it a prudent investment.

2. Coal India 

Market cap	Rs. 1,29,910.31 Cr.
P/E Ratio	8.4
EPS	Rs. 25.08
Dividend Return (1-year)	14.81%

Once more, Coal India Ltd. is a state-owned company that specializes in Indian coal mining and produces electricity. It provides more than 80% of the nation’s total coal production. In addition, the mining company runs coal washeries. India’s main coal-using sectors include steel, cement, fertilizer, and power. From Rs. 4,500 Cr. in the same quarter of 2021 to Rs. 7,700 Cr. in December 2022, Coal India’s net profit increased by 70%. The contingent liabilities are the only issue with Coal India. In 2020–21, Coal India incurred contingent liabilities of Rs. 57,000 Cr. from penalties imposed by Indian states on its various subsidiaries due to overproduction exceeding environmental authorities’ restrictions, which raises possible concerns.

3. Banco Products

Market cap	Rs. 1,695.71 Cr.
P/E Ratio	7.72
EPS	Rs. 30.72
Dividend Return (1-year)	11.31%

Banco Products Ltd manufactures engine cooling modules, such as oil, fuel, and charged air coolers, radiators, and coolers, for the Indian and international markets. More than 65 percent of Banco’s goods are supplied to large companies, such as Ashoka Leyland, Godrej, Eicher, Mahindra, and Indian Railways. Banco Products wants to expand both domestically and internationally. This business was responsible for 26% of Banco’s overall annual sales in FY22. The CAGR for banco stocks over the past year has been a commendable 44%.

4. Goodyear Tyres India

Market cap	Rs. 2,404 Cr.
P/E Ratio	23.64
EPS	Rs. 44.08
Dividend Return (1-year)	10.21%

Goodyear is one of the leading tire manufacturers in the farm tire market in India. Furthermore, all of the main tractor manufacturers, including Mahindra Tractors and Escorts, get their farm tires from Goodyear. The Goodyear stock had a year-over-year compound annual growth rate (CAGR) of 13.82%, but in September 2022, it recorded a fall in profit of Rs. 27.10 Cr., or 28% less than the profit of Rs. 37.74 Cr. in the preceding quarter. It’s also important to remember that, from 2020 to 2027, the Indian automobile market is expected to increase at a compound annual growth rate (CAGR) of about 11%, or 6,920,900 units.

5. Power Finance Corporation Ltd. (PFCL)

Market cap	Rs. 38,545 Cr.
P/E Ratio	3.59
EPS	Rs. 40.61
Dividend Return (1-year)	10.18%

The government owns 57% of Power Financing Corporation Ltd. (PFCL), another publicly traded financing company. PFCL disbursed loans worth Rs. 3,71,700 Cr during the quarter ending in September 2022. The following is how loan assets are distributed: Transmission & Distribution – 40% The lending company’s Non-Performance Assets (NPA) ratio dropped to 1.92% in FY 2022 from roughly 2.10% in FY 2021. Another advantage of the stock is that it is now trading at 0.50 times its book value, which makes it a good value at this price range.

6. Housing & Urban Development Corporation Ltd (HUDCO)

Market cap	Rs. 8,888 Cr.
P/E Ratio	4.91
EPS	Rs. 9.04
Dividend Return (1-year)	8.81%

Housing & Urban Development Corporation Ltd. (HUDCO), another stock on the list, is presently selling 0.45 times below book value. HUDCO is a leading provider of financing for housing and urban infrastructure projects. The GoI, which owns around 81% of the company, is strategically vital to accomplishing the goal of universal housing. The company’s earnings after taxes increased by 8.5% from March 2021 to March 2022, from Rs. 1,578 Cr to Rs. 1,716 Cr.

7. Sanofi Pharmaceuticals India

Market cap	Rs. 12,324 Cr.
P/E Ratio	21.24
EPS	Rs. 251.88
Dividend Return (1-year)	8.78%

Remember Sanofi India produces Combiflam, a well-known pain medication. Allegra, Lantus, and Combiflam are among the top 100 pharmaceutical brands in India. Lantus is the second most well-known brand in the diabetes treatment industry. Sanofi also exports pharmaceutical products to 50 countries, including the UK, Australia, Russia, the Czech Republic, and Germany. In the last three years, Sanofi India has demonstrated a respectable profit growth of 35.38%. With Rs. 683 in dividends per share paid in 2022, Sanofi is one of the Highest dividend paying stocks in India on the list.

8. Indian Oil Corp. Ltd. (IOCL)

Market cap	Rs. 1,11,700 Cr.
P/E Ratio	26.56
EPS	Rs. 2.98
Dividend Return (1-year)	8.50%

The Indian government’s Maharatna Company, Indian Oil Company Ltd. (IOCL), is the industry leader in oil refining and petroleum marketing. In the petroleum sector, IOCL is a full-service operator that manages everything from product marketing to refining, R&D, and pipeline transportation. IOC owns 80.60 million metric tons annually or 32% of India’s total refining capacity.

9. Oil & Natural Gas Corporation Ltd (ONGC)

Market cap	Rs. 1,91,976 Cr.
P/E Ratio	4.00
EPS	Rs. 38.10
Dividend Return (1-year)	7.00%

The Government of India’s 1956 oil exploration project, ONGC, provides around 71% of the country’s domestic oil and gas production. ONGC is among the most prosperous state-owned companies in India. ONGC’s subsidiary ONGC Videsh is exploring and producing 37 foreign oil and gas projects. ONGC stock is one of the Highest dividend paying stocks in India. ONGC stock is currently a fantastic buy because it is priced at 0.67 times its book value.

10. Power Grid Corporation Of India Ltd

Market cap	Rs. 1,49,833 Cr.
P/E Ratio	9.49
EPS	Rs. 22.64
Dividend Return (1-year)	6.22%

Although Power Grid Corporation Stock has returned less than 6.22%, I have included it in the list since it is a government-owned business with strong fundamentals. Owning 45% of India’s electricity production and 85% of the country’s interstate transmission network, Power Grid Corporation is a major contributor to the expansion of the country’s power industry. Power Grid Corporation may benefit in the long run from the government’s significant efforts to promote electric vehicles and the surge in the EV market.

How to Select Highest Dividend Paying Stocks In India?

Use the stock research and analysis tool to compile your stocks into a shortlist. The most advantageous aspect of both platforms is the ability to use queries to create a shortlist of stocks based on particular criteria. Let me show you how to make a shortlist of the Highest dividend paying stocks in India using the stock research and analysis tool.

Step 1: Visit the webpage and open a new tab.

Step 2: Execute the Yield TTM >7 query. We may get a list of stocks with dividend yields of more than 7% by running the above query. 

If you examine attentively, you’ll notice that I considered a few other significant factors in addition to the stocks on the aforementioned list before selecting each one.

For example, the reason I haven’t selected the Vedanta shares at the top of the list above is that, when I looked at the stock, I saw that almost all of the shares are pledged, which is a red flag.

A company can use share pledging as security for loans from banks or other financial institutions. It’s like pledging the registration of your house when you ask for a home loan from a bank. Thus, making a long-term investment in a business that has taken on a large debt load may prove challenging.

The banks have the right to sell the stocks to recoup the cost of the loan if the company is unable to repay it. Stock sales by large institutions may trigger market panic, which might lead to a stock market collapse and wipe out all of your money. Thus, be sure to take into account the company’s debt levels and share commitments while narrowing down your shortlist of stocks.

Conclusion

Recall that when buying shares, there are other factors to take into account besides a large dividend return. A failing business may be trying to draw in investors if it is paying out large dividends. A smart method to supplement your income is to invest in the Highest dividend paying stocks in India but to maximize your return on investment (ROI) on stock purchases, take into account both dividend yield and stock price growth.

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