Retailers are always looking for the right stock, which can yield them a good amount of return.
This is the reason why high paying stocks perform so well with the retailers. The best dividend stocks paid by those companies, which earn a reasonably good profit. When it comes to the commonly used jargon in the world of investment, then the dividend is the key.
What exactly are dividends?
For instance, let us assume that there is a company named XYZ. It earns a profit of about Rs. 100 per year.
Now, there are two methods through which the company can expand its avenues for generating revenues. One is to reinvest into the business to fuel future growth. Another one is to wait for the same benefit, which can distribute twice when the expansion is less.
The cash which is distributed to the investors is called the dividend. A company needs to pay regular dividends to its shareholders. There is a chronological step that is followed during the payment so that the ultimate procedure is understood.
How to identify the stocks according to dividend income?
Not all stocks which pay a higher dividend have the right name. Two criteria make a dividend stock eligible for investment.
- The consistent payout of the dividend.
- The consistent growth in the dividend payout.
This is why the leading IT sector, the diverse fields, and petrochemical reigns have a higher payout ratio for their shareholders. Here is how they are identified.
- Checking out the profit and loss of the company over the years.
- Checking if the EPS of the company has grown in the last five years or not.
- Also, check if the dividend per share has grown in the last five years or not.
- Compare if the EPS growth and the dividend per share growth are similar.
Ten highest paying dividend stocks in India
- Vedanta Ltd.
Vedanta Ltd. Is a subsidiary of Vedanta Resources Limited? In the field of natural resources, it is a leading and diverse company. It has presence across the whole of India, South Africa, Namibia, and Australia. It is a leader in in the Oil and Gas, Zinc, and Lead. This company has a dividend paid of around 10.18%. The payout ratio of the profit of this company is about 36%. The company is also awarded for its sustainability efforts over time.
- Hindustan Petroleum Corporation Ltd.
Hindustan Petroleum Corporation Limited is one of the most significant energy sectors, and it has a large market capitalization of about Rs. 37,013.65 crore. The dividend, which is yield by this fantastic company, is around 8.21%, and the percentage of the payout ratio stands at 17. This makes Hindustan Petroleum Corporation one of the most significant paying stocks for the long term.
- Indian Oil Corporation Ltd.
For the year ending in March 2019, Indian Oil Corporation has declared an equity dividend of about 92.50%. It amounts to around Rs. 9.25 per share for the shareholders. Indian Oil Corporation Ltd. Belonging to the largest energy sector. It is one of the largest oil and gas company based in India. It has a market capitalization worth 132,357.08 crores. The company’s high payout ratio of 66% makes it suitable for the shareholders to invest. The dividend yield by the company is 16.03%.
- Power Finance Corporation.
Power Finance Corporation has pleased many shareholders for the last ten years. This is because of its history of high dividend payouts, which yields out to 8.2%. It lies in the finance sector, and it has a market capitalization of about 26,268.81 crores. The payout ratio of this company is around 21.94%. Consistency & excellent stock management by the company makes it a lucrative investment avenue.
- Reliance Industries Ltd.
RIL is perhaps India’s most common brand name. It is said to be among the most reliable company stocks for the long term. The company has functioned in the petrochemical sector and has a market capitalization of about INR 143,323 crores. Its dividend yield is close to .52%. Its reliability comes majorly from its long history of distributing dividends.
- Coal India Ltd.
Coal India operates in the energy sector with a whopping market capital of about 22,198.06 crores. The company’s average dividend yield is 7.85%. The company is one of India’s most consistent dividend distributors, making it the right name for shareholders. So investors who are looking over consistency, as well as long term high paying dividend stocks can scope here. It is an ideal choice for them.
- Hero MotoCorp Ltd.
A leader in the leading automobile sector of India, Hero MotoCorp, is an investor’s favourite. The company has a market share of about 58,235.16 crores. The two and the three-wheeler manufacturers have a dividend, which yields around 3.31%. The payout ratio of this company is even at a rate of 2%. With a consistent history and a team of expert management, this company has stood up to the name. Since it is rewarding in nature, it is one of the leading dividend-paying stocks in India.
- Castrol India Ltd.
Working in the petrochemical sector, Castrol India Limited pays a consistent rate of interest to its shareholders. It has a budding market capital of 926.90 crores. The dividend yield of Castrol is around 68%. Again, consistency in dividend payouts makes it lucrative for investors. Over time, this company yields a high profit and which makes it the highest-grossing dividend-paying stocks located in India.
- Hindustan Zinc Ltd.
Hindustan Zinc Limited is a metal sector company. It has a market capitalisation of about 110,956.88 crores. The dividend, which is yield by this grossing company, is around 7.04%. The payout ratio of this company is a firm 14%. Therefore, it is an apt avenue for investors looking for long term opportunities.
- Infosys Ltd.
Infosys is one of India’s preeminent information and Technology Company. The company has a market capitalization of around 271,037 crores. Its dividend yield is approximately 3.22%, with a payout ratio of about 9%. Infosys Ltd is a growing and leading IT company which is serving a ton of shares to the shareholders for decades. Over these years, all shareholders put their trust upon this platform for the growing dividend, including a brand name.
Summarising the list of companies
The list mentioned above of the highest dividend-paying stocks in India is an ideal deal for the shareholders. The list of companies is consistent in their payout ratio and returns in the form of a dividend. The consistency in the payout suggests that the company is earning a sufficient amount of profit over the years. The prime reason why they can distribute them among their shareholders.
The companies, as mentioned above, must not be considered as recommendations for investment, nor we believe dividend payment as the only measure in research. The same is for information purposes only.