High dividend paying stocks can be quite attractive to investors, particularly for those seeking regular income alongside potential capital appreciation.
In this article, we will provide the essence of high dividend paying stocks, the top 10 high dividend paying stocks in India, key factors to consider when selecting them, and their advantages.
| Company | Dividend % | Dividend (INR) | Dividend Type | Announcement Date | Ex-Date |
|---|---|---|---|---|---|
| Vedanta Ltd. | 1100 | 11 | Interim | 13-12-2023 | 27-12-2023 |
| REC Ltd. | 35 | 3.50 | Interim | 01-11-2023 | 13-11-2023 |
| Steel Authority of India Ltd. | 5 | 0.50 | Final | 26-05-2023 | 20-09-2023 |
| ITC Ltd. | 675 | 6.75 | Final | 18-05-2023 | 30-05-2023 |
| Britannia Industries | 7200 | 72 | Interim | 28-03-2023 | 13-04-2023 |
| Balkrishna Industries | 200 | 4 | Interim | 17-01-2024 | 02-02-2024 |
| Punjab National Bank | 32.5 | 0.65 | Final | 19-05-2023 | 23-06-2023 |
| Polycab India | 200 | 20 | Final | 12-05-2023 | 21-06-2023 |
| Tata Consultancy Services Ltd | 1800 | 18 | Special | 11-01-2024 | 19-01-2024 |
| Tata Steel Ltd | 360 | 3.60 | Final | 02-05-2023 | 22-06-2023 |
Top 10 High Dividend Paying Stocks in India
For investors seeking substantial returns, choosing the best dividend stocks offers a promising opportunity. The following list delves into the features of top dividend paying stocks in India, providing a comprehensive overview for informed investment decisions.
1. Vedanta Ltd.
- Dividend %: 1100
- Dividend (INR): 11
- Dividend Type: Interim
- Announcement Date: 13-12-2023
- Ex-Date: 27-12-2023
Overview
Vedanta Ltd. is a global natural resources company with operations spanning zinc, lead, silver, oil & gas, iron ore, copper, aluminum, and power. Headquartered in India, Vedanta is among the top producers of these resources globally, focusing on sustainable development, safety, and community engagement.
2. REC Ltd.
- Dividend %: 35
- Dividend (INR): 3.50
- Dividend Type: Interim
- Announcement Date: 01-11-2023
- Ex-Date: 13-11-2023
Overview
REC Ltd., formerly known as Rural Electrification Corporation, is a leading public Infrastructure Finance Company in India’s power sector. The company plays a pivotal role in financing and promoting rural electricity projects across India to enhance the power infrastructure in the country.
3. Steel Authority of India Ltd. (SAIL)
- Dividend %: 5
- Dividend (INR): 0.50
- Dividend Type: Final
- Announcement Date: 26-05-2023
- Ex-Date: 20-09-2023
Overview
Steel Authority of India Ltd. (SAIL) is one of the largest steel companies in India and one of the top steel makers globally. SAIL is known for its comprehensive range of high-quality steel products, serving various sectors including construction, engineering, power, railways, automotive, and defense.
4. ITC Ltd.
- Dividend %: 675
- Dividend (INR): 6.75
- Dividend Type: Final
- Announcement Date: 18-05-2023
- Ex-Date: 30-05-2023
Overview
ITC Ltd. is a conglomerate with a significant presence in FMCG, hotels, packaging, paperboards, and agri-business sectors in India. The company’s commitment to sustainability and innovation shows in its many different products and services, catering to different customer needs, while keeping high quality.
5. Britannia Industries
- Dividend %: 7200
- Dividend (INR): 72
- Dividend Type: Interim
- Announcement Date: 28-03-2023
- Ex-Date: 13-04-2023
Overview
Britannia Industries is a prominent player in the Indian food industry, known for its extensive range of bakery and dairy products. With a rich history over a century, the company has found itself as a household name, offering a variety of biscuits, bread, cakes, and dairy items.
6. Balkrishna Industries
- Dividend %: 200
- Dividend (INR): 4
- Dividend Type: Interim
- Announcement Date: 17-01-2024
- Ex-Date: 02-02-2024
Overview
Balkrishna Industries specializes in manufacturing off-highway tires used in specialized sectors like agriculture, construction, industrial vehicles, and earthmoving equipment. Known for its high-quality products and strong global presence.
7. Punjab National Bank
- Dividend %: 32.5
- Dividend (INR): 0.65
- Dividend Type: Final
- Announcement Date: 19-05-2023
- Ex-Date: 23-06-2023
Overview
Punjab National Bank is one of India’s leading public sector banks, offering a wide range of banking services. It plays a crucial role in supporting various economic sectors, including agriculture, small and medium enterprises.
8. Polycab India
- Dividend %: 200
- Dividend (INR): 20
- Dividend Type: Final
- Announcement Date: 12-05-2023
- Ex-Date: 21-06-2023
Overview
Polycab India is a leading manufacturer of wires and cables and a fast-growing player in the FMEG (Fast Moving Electrical Goods) sector. It’s recognized for its innovation, quality, and contribution to India’s infrastructure development.
9. Tata Consultancy Services Ltd. (TCS)
- Dividend %: 1800
- Dividend (INR): 18
- Dividend Type: Special
- Announcement Date: 11-01-2024
- Ex-Date: 19-01-2024
Overview
Tata Consultancy Services Ltd. is a global leader in IT services, consulting, and business solutions. TCS is known for its innovation, deep domain expertise, and transformative technological services across various industries.
10. Tata Steel Ltd.
- Dividend %: 360
- Dividend (INR): 3.60
- Dividend Type: Final
- Announcement Date: 02-05-2023
- Ex-Date: 22-06-2023
Overview
Part of the Tata Group, Tata Steel is among the top global steel companies, with a balanced global presence in over 50 developed European and Asian countries. It is known for its sustainable practices and steel products in high quality.
Factors to Consider When Choosing Dividend Stocks
Selecting the right dividend stocks is about understanding the fine balance between yield, risk, and growth. Here are the key factors to weigh in on this decision:
1. Dividend Yield
This metric, appeared as a percentage, is essential for assessing the appeal of a stock that pays dividends. While a higher dividend yield can suggest a good opportunity, too high yields could signal potential risks or indicate that the business is facing difficulties.
2. Dividend Payout Ratio
This ratio measures the proportion of dividends distributed to the company’s net income, serving as an important gauge of a dividend’s long-term viability. A company with a lower distribution ratio is generally in a better position to uphold or increase its dividend payouts, whereas a higher ratio could be a warning sign of unsustainability.
3. Company Stability and Growth Prospects
Companies with a stable earnings history and a positive growth outlook are typically better positioned to sustain and increase dividend payments. Investors should seek out companies with solid fundamentals and a clear path to future earnings growth.
4. Sector and Economic Considerations
External factors such as economic conditions, interest rate environments, and specific risks can impact a company’s ability to pay dividends. It’s important to assess these broader factors with the company’s individual performance.
Advantages of Investing in High Dividend Paying Stocks
High dividend paying stocks present several key benefits for investors:
- Steady Income: High dividend paying stocks provide regular income, making them ideal for investors seeking consistent cash flow, such as retirees.
- Compounding Growth: Reinvesting dividends can amplify the compounding effect, boosting portfolio growth over time without extra personal investment.
- Lower Volatility: These stocks typically show less price fluctuation, offering a protection during market dips through consistent dividend payouts.
- Tax Efficiency: In many jurisdictions, dividends are taxed at a lower rate than other forms of income, providing tax advantages to investors.
- Portfolio Diversification: Including high dividend paying stocks in your portfolio can provide diversification benefits, reducing overall investment risk.
Conclusion
High dividend paying stocks are attractive for investors seeking steady income and growth. The essence of these investments lies in their ability to offer consistent returns through dividends, while also providing opportunities for portfolio diversification and lower volatility.
Investors interested in these assets should carefully evaluate factors such as dividend yield, payout ratio, and company stability to make informed decisions. Overall, high dividend paying stocks can serve as a foundational element for a balanced investment strategy, blending income generation with growth potential.
FAQs
High dividend paying stocks are shares in companies that regularly distribute a significant portion of their profits to shareholders in the form of dividends.
Dividends are typically paid quarterly, although some companies may opt for monthly, semi-annual, or annual payments.
Yes, companies with growing profits may increase their dividend payments over time, reflecting their financial health and commitment to shareholders.
High dividend paying stocks can be less risky due to their steady income and potential to cushion portfolio volatility, but it’s important to assess each stock’s overall risk profile.
Yes, dividends can be reinvested to purchase additional shares, compounding the investment’s growth over time through a dividend reinvestment plan (DRIP).
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