Top 10 Highest Dividend Paying Stocks in India

Before buying any stock, investors consider a number of factors. These reasoning may include the company’s bright future prospects, strong background, outstanding historical performance, or dividend payments to investors.

What is Dividend?

Dividend is essentially portion of a company’s profits that is distributed to shareholders. Simply, when a company makes profit or surplus, it is able to pay a proportion of the same profit as a dividend to shareholders.

Many investors find investing in businesses that pay dividends to be extremely profitable. Like the cherry on top of a cake, dividend gains combined with capital gains enhance its appearance and draw the eye.

Now, we will discuss about the top 10 highest dividend paying stocks in India.

Which are the top 10 Indian stocks with highest dividend yield?

Let’s discuss about these top 10 high dividend stocks in detail:

1. Bajaj Auto

It is a two-wheeler manufacturer with a track record of success. The most valuable two- and three-wheeler company in the world is Bajaj Auto, which was the first company in the two- and three-wheeler industry to reach a market value of INR one trillion.

A $1 billion company with no debt that has sold more than 18 million motorcycles in more than 70 nations. Two out of every three motorcycles exported from India to other countries have the Bajaj logo on them.

The Board of Directors has approved a dividend at the rate of Rs. 140 per share (1400 percent) of the face value of Rs. 10 each on equity shares for the financial year ended March 31, 2022.

Bajaj Auto Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2022	140.00	Final
2021	140.00	Final
2020	120.00	Interim
2019	60.00	Final
2018	60.00	Final

The company’s revenues have grown at a CAGR of 4% over the last 5 years whereas profit after tax has grown at a CAGR of 4% over the same period. The company has superior return ratios with ROCE of 25.4% and ROE of 19.8%. Apart from all this, the company is a high dividend paying stock with a payout ratio of 83.4% and provides a dividend yield of 3.84%.

2. GAIL

With a market share of 70% in the natural gas transmission industry and a vast pipeline network spanning 13,340 km, Gas Authority of India Limited holds a commanding position.

Additionally, GAIL has expanded into downstream industries such as the production of petrochemicals and liquified petroleum gas (LPG). Petrochemicals and LPG have been contributing to GAIL’s profitability and maintaining a good segmental contribution.

GAIL financial risk profile is characterized by healthy profitability and strong cash accruals resulting in comfortable debt metrics and capital structure.

GAIL Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2022	5.00	Interim
2021	4.00	Interim
2020	6.40	Interim
2019	0.88	Final
2018	1.44	Interim

The company’s revenue and profits have grown at 1.97% and 26.7% CAGR respectively over the last 5 years. The debt levels continue to remain low with Debt/Equity at 0.14. On the dividends front, the company has constantly maintained a dividend payout ratio of 36.2% which is not very high, but its excellent superior dividend yield is currently at 5.95%.

3. Hindustan Zinc

With a market share of 78% by volume, it enjoys a dominant position in the domestic zinc market. Along with this, high entry barriers, such as capital intensive operations and lack of zinc ore mines, lend a significant competitive edge to the business risk profile. Presence in global markets also enhances its revenue diversity.

The company has a dividend payout ratio of 113% in FY21 leading to a dividend yield of 6.27%.

Hindustan Zinc Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2021	18.00	Interim
2020	21.30	Interim
2019	0.00	Interim
2018	20.00	Interim
2017	2.00	Interim

The financial risk profile is supported by a large net worth, strong liquid surplus, and absence of long-term debt. Net cash and equivalent stood at Rs 15,130 crore as on March 31, 2021. However, dividend payouts are generally high in order to support debt at Vedanta Resources.

4. SJVN

It is a mini ratna company promoted by the GoI (59.92%) and the GoHP (26.85%); the balance stake in the entity is held by the public. SJVN has a cost-plus tariff structure for both operational and under construction projects which ensures recovery of fixed charges for debt servicing as well as earning regulated returns. The company has a good dividend track report and has consistently declared dividends for the last 5 years.

In contrast to other Central Public Sector Undertakings operating in this sector, SJVN has significantly fewer debtor days due to the risk of delayed payments from utilities with poor financial standing that is minimized by its competitive cost of generated power.

SVJN Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2022	1.15	Interim
2021	0.40	Final
2020	0.50	Final
2019	0.65	Final
2018	0.20	Final

SJVN has a dividend payout ratio of 53.95%. Currently the company provides an average dividend yield of 8%.

5. ITC

Earlier known as Imperial Tobacco Company, started a cigarettes manufacturing business with brands like Goldflake, Flake, Classic under its banner. It has expanded into education and stationery products, hospitality, paperboards and packaging, among others. Acquisition of Sunrise Foods Pvt. Ltd is expected to strengthen its market position in the spices segment and further improve diversity.

Healthy internal cash accruals, low debt and robust liquidity have strengthened the financial risk profile. Company’s dividend track record has been high and consistent making it a very good dividend bet.

A strong brand, a wide product portfolio, an established distribution network, and robust research and development capability have enabled the company to consolidate its position as the leader in the Indian cigarettes market.

ITC Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2022	6.25	Final
2021	5.75	Final
2020	10.15	Final
2019	5.75	Final
2018	5.15	Final

The company has zero debt, against a large tangible net worth of over Rs 60,899 crore. Over the past 10 years the company has maintained a dividend payout of over 50%, currently yielding to 4.39%. Its dividend track record has been high and consistent making it a very good dividend bet.

6. Hero MotoCorp

It is the world’s largest manufacturer of two-wheelers with the vision of a mobile and an empowered India, powered by its bikes. The Company’s growth in the two wheeler market in India is the result of an intrinsic ability to increase reach in new geographies and growth markets. Hero MotoCorp’s extensive sales and service network now spans over to 5000 customer touch points. These comprise a mix of authorized dealerships, Service & Spare Parts outlets, and dealer-appointed outlets across the country.

Hero Honda’s product range includes a variety of motorcycles that have set the industry standards across all the market segments. The Company also started manufacturing scooters in 2005. Hero Honda offers a large no. of products and caters to a wide variety of requirements across all the segments.

Hero MotoCorp Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2022	35	Final
2021	25	Final
2020	25	Final
2019	32	Final
2018	40	Final

Hero MotoCorp paid a total dividend of 17,022 million INR last year, for a market value of 458,830 millions (Market Cap 299,629 millions). Dividend per share of Hero MotoCorp is 85.11 INR, and its stock market price 2,294.15 INR.

7. REC

REC is a Navratna Central Public Sector Undertaking under the Ministry of Power. It is a leading infrastructure finance company with a net worth of over ₹50,000 crore (as on 31st March, 2022). Their business activities involve financing projects in the complete power sector value chain, be it generation, transmission or distribution.

It provides financial assistance to state electricity boards, state governments, central/state power utilities, independent power producers, rural electric cooperatives and private sector utilities through our extensive network of 22 offices across the country.

As a natural corollary, they have been appointed as a Nodal Agency for Government of India’s flagship schemes viz. Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGAYA), Deen Dayal Upadhaya Gram Jyoti Yojana (DDUGJY) and National Electricity Fund (NEF). Further, alongwith PFC, REC has also been designated as Nodal Agency for Revamped Distribution Sector Scheme (RDSS).

Besides, REC assists Ministry of Power in monitoring of the Ujjwal Discom Assurance Yojana (UDAY) which seeks to operationally reform and financially turnaround the power distribution companies of the country.

REC Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2022	6.00	Final
2021	2.50	Interim
2020	6.00	Interim
2019	11.00	Interim
2018	1.75	Final

The Company has been consistently paying out dividends to its shareholders and can be reasonably expected to continue declaring in the future as well.

The Board of Directors of REC Ltd also has recommended the payment of Final Dividend of Rs. 4.80 (Rupee Four Rupees and eighty paise only) per share on the face value of Rs. 10/- each for the Financial Year 2021-22, subject to approval of the shareholders in the ensuing Annual General Meeting.

8. Oil India Limited

A Navratna company which is fully integrated in exploration and production in the upstream sector dating back to the glorious year (1889) of Oil discovery in India. OIL is a state-owned enterprise of the Government of India, under the administrative control of the Ministry of Petroleum and Natural Gas and is the second largest national oil and gas company in India.

As one of its strategic initiatives, OIL has also selectively diversified into the Renewable & Alternative Energy sector, installing and commissioning RE projects in the Wind and Solar domains with total installed capacity of 188.10 MW comprising 174.10 MW of Wind Energy projects and 14 MW of Solar Energy projects.

The Company’s financial prudence is reflected in the strong credit rating ascribed by International and Domestic ratings agencies. The CARE ratings given are CARE AAA and CARE A1+ for Long Term and Short Term respectively, which is their highest rating.

Oil India Limited Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2022	5.75	Interim
2021	3.50	Final
2020	1.60	Final
2019	1.75	Final
2018	1.00	Final

In recent years, OIL has stepped up E & P activities significantly in North-East India. OIL has set up the NEF (North East Frontier) project to intensify its exploration activities in the frontier areas in the North East, which are logistically very difficult and geologically complex.

9. Coal India

It is a government owned coal mining company. It produces coal and coal-based products. The company’s portfolio of products includes coking coal, semi coking coal, non-coking coal, hard coal, washed and beneficiated coal, coal fines, heavy oil, and coke.

The company operates open cast mines, underground mines and mixed mines. CIL’s products find application in steel making, fertilizer, glass, power utilities, cement, ceramic, chemical, paper, domestic fuel, and industrial plants. It also provides mining consultancy services across India. The company operates its mining deposits across India, and also owns a mining company in Mozambique. CIL is headquartered in Kolkata, West Bengal, India.

Coal India Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2022	5.00	Interim
2021	9.00	Interim
2020	7.50	Interim
2019	5.85	Interim
2018	7.25	Interim

The payout on earnings should be complemented with the payout on cash flow since it is this last amount which can be distributed to shareholders. Cash flow per share of Coal India is INR 20.80 per share, which is higher than the dividend per share paid by the company of INR 17.50, so the company generates enough cash to maintain his dividend in the future.

10. VST Industries

ST Industries Ltd manufactures and distributes cigarettes and unmanufactured tobacco under the brand names of Charms, Charminar, Gold, Moments, and Zaffran. The company operates its business out of India. In terms of revenue from operations, a majority comes from the sale of cigarettes and the remainder generally comes from the sale of unmanufactured tobacco. Geographical segments consist of sales within India and sales outside of India with a majority derived from India.

VST Industries Dividend Payout in last 5 years

Payout Year	*Dividend Amount Per Share (in Rs.)**	Dividend Type
2022	140.00	Final
2021	114.00	Final
2020	103.00	Final
2019	95.00	Final
2018	77.50	Final

During the past 12 months, VST Industries’ average Dividends Per Share Growth Rate was 10.70% per year. During the past 3 years, the average Dividends Per Share Growth Rate was 13.70% per year. During the past 5 years, the average Dividends Per Share Growth Rate was 10.80% per year. During the past 10 years, the average Dividends Per Share Growth Rate was 7.60% per year.

During the past 13 years, the highest 3-Year average Dividends Per Share Growth Rate of VST Industries was 33.90% per year. The lowest was 2.30% per year.

To Sum Up

If you’re a dividend investor, you cannot just choose the stocks with the highest dividends. If the company is paying high dividends then there are few points to look at for eg. understanding companies underlying business, debt-to-equity ratio, future growth etc. There is often a reason why companies pay out high dividends, right?
So, it is advisable to invest and trade in these highest dividend paying stocks only after studying and gathering complete information about the company and market movements.

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Disclaimer: This blog is not to be construed as investment advice. Trading and investing in the securities market carries risk. Please do your own due diligence or consult a trained financial professional before investing.

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