Best Highest Dividend Paying Stocks in India

For many investors, the amount of dividend a company is paying is an essential factor they analyze before deciding whether to invest in a company.

Dividend-paying stocks are an excellent way to invest in the stock market. Although they're not as popular as high-yield bonds, dividend-paying stocks offer investors a way to earn a steady income from their investments.

Dividends need to be seen in correlation with the net profits. Some of the best dividend-paying companies use their profit judiciously. While rewarding the shareholders is good, the gain needs to be strategically reinvested in the company. This ensures growth and enables long-term wealth creation for investors.

This article will discuss the upcoming dividend-paying stocks and some critical dividend-related concepts. 

5 Highest Dividend Paying Stocks in India

India has a booming economy, and the Indian stock market has been growing at an impressive rate. However, some stocks pay dividends and are considered dividend-paying stocks.

The following list of dividend-paying stocks in India includes large institutions and smaller companies. Most of these companies have been around for many years, which makes them an excellent choice for investors who want to invest in a well-known company that will give them steady returns over time.

Here’s a list of the best upcoming dividend-paying stocks:

Factors To Consider Before Investing In Dividend Paying Stocks

Here are a few things to keep in mind about upcoming dividend-paying stocks:

• What do the Ratios tell us

A very high payout or yield ratio would mean significantly fewer profits are reinvested. This can be derived easily from the formula. If the dividend is very high, the company is diverting lesser profit for reinvestment back into the business and more for dividend payouts.

• Analyzing Dividends

These ratios should only be used to analyze the dividend payout situation of the company and should not be the sole reason you are or are not investing in a company's stock. Even the highest dividend-paying stores can turn out to be bad investments in the future.

• The Yield Ratio is Dynamic

Share market price is a dynamic figure. It may change every second of a trading session. Therefore, dividend yield could also vary.

• Do Not Look at Absolute Dividend Numbers

Do not look at these numbers to make decisions. A dividend of Rs 100 per share doesn't speak highly about a company. And a dividend of Rs 10 per share doesn't talk about a company's low.

The top dividend paying stocks may not necessarily be a good investment. First, you must examine the company’s earnings, outstanding shares, shareholders, and other metrics. And this is where the ratios come into play.

Overview of some of the Highest Dividend-Paying Stocks in India Recently

Here is a brief overview of some high dividend paying stocks present in India-

1) Britannia Industries

Founded in 1918, Britannia Industries Limited is primarily involved in the manufacturing and selling various food products. Its product portfolio includes biscuits, bread, cakes, rusk, and dairy products, including cheese, beverages, milk, and yoghurt.

2) Balkrishna Industries

Balkrishna Industries Limited is an India-based company engaged in offering pneumatic tires. The Company provides tires, tubes, and tire flips. In addition, it focuses on manufacturing a range of off-highway tires (OHT).

These tires are mainly meant for agricultural, industrial, construction, earthmover and port, mining, forestry, lawn and garden, and all-terrain vehicles (ATV).

3) Punjab National Bank

Punjab National Bank (the Bank) is an India-based bank. The Bank’s segments include Treasury, Corporate/Wholesale, Retail, and Other banking operations. The Treasury segment comprises the entire investment portfolio and trading in foreign exchange and derivative contracts.

The Bank provides various banking services, such as agriculture banking, retail banking, treasury operations, corporate banking, merchant banking, non-resident Indian (NRI) services, depository services, digital banking services, and mutual funds.

Its depositary services include current deposits, savings deposits, term deposits, recurring deposits, Capital Gain Account Schemes, and Gold Monetization Scheme.

4) Dalmia Bharat 

Dalmia Bharat Limited is an India-based cement manufacturing company. The Company principally manufactures and sells cement and its related and refractory products.

The Company’s products include Ordinary Portland Cement (OPC), Portland Slag Cement (PSC), Portland Pozzolana Cement (PPC), Portland Composite Cement (PCC), and other speciality cement. Its speciality cement includes sulphate-resisting portland cement, railway sleeper cement, oil well cement, and special cement for airstrips and nuclear power plant construction.

5) Polycab India 

Polycab India Limited manufactures and sells wires, cables, and fast-moving electrical goods (FMEG) under the POLYCAB brand.

It operates through three segments: Wires & Cables, Fast moving electrical goods (FMEG), and others. Its Wires & Cables segment manufactures and sells electric wires and cables.

Its FMEG segment is an electric consumer durable business comprising businesses covering electric wiring accessories and appliances. Its Copper segment is engaged in manufacturing, selling, and job work on copper rods and wires.

Its Other segment consists of engineering, procurement, and construction, a business which includes design, engineering, supply, execution, and commissioning of power distribution.

Before making a decision to invest in any of the above or other stocks, make sure to calculate brokerage through a Stock Market Calculator. It might be useful for you to estimate your brokerage and other expenses in advance.

Summing Up

These may be the top dividend-paying stocks in India. However, remember that this should not be the only reason for stock picking.

Companies may also pay dividends if they are making losses. There are a host of other factors you need to look at, like profit history, business outreach, debt conditions, management quality, etc. Do your research to make an informed decision.

Happy Investing!

Disclaimer: This blog is solely for educational purposes. The securities/investments quoted here are not recommendatory.

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Research Analyst - Bavadharini KS