Investors seeking steady income in India often turn to dividend-paying stocks, especially in sectors known for their consistent payouts. These stocks can provide attractive returns over time, offering long-term stability. Dividend yield, a key metric, is calculated as the annual dividend paid by a company divided by its stock price, expressed as a percentage. For example, a stock priced at ₹100 with a ₹5 annual dividend will yield 5%.
In this guide, we’ll highlight the highest dividend-paying stocks in India for 2024, explore key metrics, risks, and tax implications, and offer expert tips on selecting the best dividend stocks for your portfolio.
This section lists India's top 10 dividend-paying stocks, ranked by their dividend yields for 2024. These stocks represent companies with a consistent track record of rewarding shareholders and are ideal for investors seeking stable income opportunities.
| Top Highest Dividend Paying Stocks in India | CMP | Div. Yield (%) |
|---|---|---|
| 1. Taparia Tools Ltd. | 9.19 | 435 |
| 2. Fortis Malar Hospital | 53.6 | 79.3 |
| 3. Xchanging Solutions | 108 | 29.6 |
| 4. Chennai Petroleum | 596 | 9.17 |
| 5. Vedanta Ltd. | 446 | 7.79 |
| 6. Bharat Petroleum Corporation Ltd. | 296 | 7.13 |
| 7. Coal India Ltd. | 490 | 6.12 |
| 8. Oil And Natural Gas | 259 | 4.74 |
| 9. PowerGrid Infrastructure | 86.3 | 3.49 |
| 10. Aster DM Healthcare | 439 | 0.46 |
The above list highlights the maximum dividend-paying stocks in India, selected based on their yield and financial performance.
A dividend is a portion of a company's profit that it distributes to its shareholders as a reward for investing in its stock. Dividends can be paid in cash or additional shares of stock. When a company earns a profit, it may share a part with its investors to say "thank you" for their support. Dividends are typically paid quarterly or annually, providing a steady source of income for shareholders.
Dividend stocks are shares of companies that regularly distribute a portion of their profits to investors in the form of dividends. These stocks are attractive for investors seeking income and capital appreciation. Unlike growth stocks that primarily rely on price appreciation, dividend stocks provide regular payouts, making them popular for those who prefer steady returns.
By investing in dividend-paying companies, you receive a consistent stream of income, which can be reinvested or used for personal expenses. These stocks are particularly popular among retirees or long-term investors looking for reliable, low-risk investments.
Here’s a detailed overview of the highest dividend-paying stocks in India. This section includes key metrics like market cap, dividend yield, and payout ratio for each of the top 10 stocks, helping you make informed investment decisions
Taparia Tools Ltd. is India's leading hand tools manufacturer, renowned for its high-quality products and engineering expertise. The company specializes in tools for construction, engineering, and manufacturing. With consistent performance and shareholder returns, Taparia Tools ranks among the top dividend-paying stocks in India.
However, due to the low market cap, it's not much preferred over other stocks.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 214.73 | -70.59 | -88.81 |
Fortis Malar Hospital Ltd. operates as a premium healthcare provider, offering cardiology, neurology, and oncology services. Its focus on advanced medical technology and patient-centric care makes it a reliable stock for investors seeking consistent dividends in the healthcare sector.
However, due to the low market cap, it's not much preferred over other stocks.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -26.18 | -18.01 | 7.45 |
Xchanging Solutions Ltd provides information technology services and business process outsourcing. The company's major offerings span strategic consultation, application maintenance/support, software development, and application deployment services. Among its goods and services is ITO.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 12.85 | 8.49 | 104.06 |
Chennai Petroleum Corporation Ltd. is a leading player in India's refining sector and is known for its robust dividend payouts. The company mines crude oil and manufactures petroleum products, contributing to the energy sector’s growth.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -0.59 | 402.91 | 1344.45 |
Vedanta Ltd. is a diversified natural resources company involved in zinc, iron ore, copper, and aluminium production. It has consistently rewarded shareholders with high dividend payouts, solidifying its position as one of the highest dividend-paying stocks in India in the last 10 years.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 89.70 | 28.47 | 211.14 |
BPCL is a leading player in the Indian oil and gas sector. Known for its robust supply chain and refining operations, it offers consistent dividends, making it a reliable choice for dividend-seeking investors.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 43.38 | 45.31 | 16.19 |
Coal India Ltd. is a public sector company and the largest global producer. It is critical in India's energy supply chain and stands out for its substantial dividend yield and shareholder returns.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 24.62 | 159.23 | 107.46 |
ONGC is India's leading oil and gas exploration company. Its steady cash flows from hydrocarbon production ensure regular dividends, making it a top pick among most dividend-paying stocks.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 36.62 | 67.67 | 93.28 |
PowerGrid InvIT owns and operates transmission assets, offering stable income through dividends. As a regulated entity, it ensures long-term returns for its shareholders, making it a key good dividend-paying stock.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| -12.39 | -27.97 | -17.03 |
In the Middle East and India, DM Healthcare Private Limited is a conglomerate in the healthcare industry; this is one of the highest dividend-paying stocks in India, and it runs pharmacies, medical facilities, diagnostic centres, and hospitals. It provides management and consulting services in addition to primary, secondary, and tertiary healthcare.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 27.22 | 120.53 | 203.70 |
Here are some of India's best dividend-paying stocks in the last 10 years. These companies show potential for growth over the long run, but it's essential to conduct thorough research and consider the risks before investing.
| Highest dividend paying stocks ( last 10 years ) | 5yr Avg Yield (%) |
|---|---|
| 1. Taparia Tools Ltd. | 229.60 |
| 2. Fortis Malar Hospital | 15.73 |
| 3. IRB InvIT Fund | 12.13 |
| 4. Vardhman Acrylics Ltd. | 11.14 |
| 5. Vedanta Ltd. | 10.11 |
These above stocks are considered some of the best dividend-paying stocks for the long term, offering consistent returns and strong financial stability.
While high-dividend stocks can offer attractive income opportunities, they come with certain risks that investors should carefully consider before investing:
In 2024, dividend stocks offer several advantages for investors:
Selecting the right high-dividend stocks for investment requires careful analysis. Here’s a simple guide to help you:
The Finance Act 2020 introduced a new way of taxing dividend income in India. Here’s an overview:
Example:
If an investor earns ₹6,000 as a dividend from a stock, a TDS of ₹600 (10%) is deducted, leaving ₹5,400 as the net payout. Investors can claim the TDS while filing their income tax return.
Understanding these rules can help you evaluate the tax efficiency of dividend-paying stocks, ensuring you maximize returns.
Before diving into dividend stocks, it's essential to understand and consider certain key ratios:
The dividend yield is like a measuring tape for how much money you can make from owning a stock's dividends. It's a way to see how much bang you get for your buck. Here's how it works: you take the annual dividend per share (that's how much money the company gives you for each share you own) and divide it by the stock's price per share. This gives you a percentage, which is the dividend yield.
So, if a stock's price is ₹100 per share and it pays ₹5 in dividends per year, the dividend yield would be 5%. Dividend yield helps you compare different stocks and see which ones give you the most return for your investment.
| Differences | Dividend Yield | Dividend Ratio |
|---|---|---|
| Definition | Measures the annual dividends per share relative to the stock price. | Indicates the percentage of earnings distributed as dividends. |
| Calculation | Dividend Yield = Annual Dividend per Share / Stock Price | Dividend Ratio = Dividends per Share / Earnings per Share |
| Focus | Focuses on the return on investment in terms of dividend income. | Focuses on the proportion of earnings paid out as dividends. |
| Indicator of | Indicates how much income an investor can expect relative to the stock price. | Reflects the portion of earnings allocated to dividends. |
| Usefulness | Useful for income-oriented investors seeking regular cash flow. | Useful for assessing a company's dividend distribution strategy and financial health. |
| Example | If a stock's price is ₹100 per share and it pays ₹5 in dividends per year, the dividend yield would be 5%. | If a company's earnings per share (EPS) is ₹10 and it pays ₹2 in dividends per share, the dividend ratio would be 20%. |
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Investing in the highest dividend-paying stocks in India is an excellent strategy for generating regular income and building wealth over time. Focus on stocks with strong dividend yields and sustainable payout ratios, and understand the tax implications of dividend income in India. While high-dividend stocks offer attractive returns, investors must also consider risks such as market volatility and tax changes.
By conducting thorough research and crafting a clear investment plan, you can leverage the potential of top dividend-paying stocks to enhance your portfolio.
The highest dividend-paying stocks in India are Taparia Tools Ltd, Fortis Malar Hospital, Xchanging Solutions, Chennai Petroleum, and Vedanta, which are known for their consistent and highest dividend payout stocks.
To find high dividend-paying stocks, look for companies with a strong track record of dividend payments, a high dividend yield, and a sustainable dividend payout ratio. Financial news websites, stock screeners, and investment advisors can also provide valuable insights.
Here are some of India's best dividend-paying stocks in the last 10 years.
1. Taparia Tools Ltd
2. Fortis Malar Hospital
3. IRB InvIT Fund
4. Vardhman Acrylics Ltd.
5. Vedanta Ltd.
The highest dividend-paying penny stock in India is Taparia Tools Ltd. However, it's important to note that penny stocks typically come with higher risk. Taparia Tools has a relatively low market cap and liquidity, making it a volatile investment option.
High dividend-paying stocks can be a good investment for those seeking regular income and potential capital appreciation. However, it's important to evaluate the company's financial health, dividend sustainability, and market conditions before investing.
The risks include potential dividend cuts, market volatility, sector-specific challenges, income dependency, interest rate sensitivity, and company-specific risks. Thorough research and diversification can help mitigate these risks.
Disclaimer: This article is intended for educational purposes only. Please note that the data related to the mentioned companies may change over time. The securities referenced are provided as examples and should not be considered as recommendations.
