Top dividend stocks in India
One can consider dividends to be an essential factor as it is viewed by investors as an income source from investing.
New investors consider it to be a driving force and it was one of the top aspects kept in mind by amateur investors before investing until a few years earlier when the stock market was not technically driven to that extent.
However, this sort of mentality has changed with the advancement in data-driven investors as well as technology.
In spite of this, dividends happen to be an essential factor when it comes to investing in stocks.
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Factors to take into consideration prior to investing in dividend-paying stocks
It is essential to consider the following aspects prior to spending on dividend-paying stocks:
1. For individuals interested in a steady income
In most cases, these companies happen to be stable businesses that have got to a certain degree of saturation for a certain period of time.
Therefore, these stocks are intended for those who like to have a steady income and like to invest in businesses for a longer period.
2. Might not depict massive growth
Dividend stocks might not be the most effective option In case an investor is searching for massive growth.
Here, we like to mention that some companies that have grown multiple-folds don’t even provide dividends.
3. Setting targets
The choice of stocks is extremely important since the most vital thing is to set targets for your yearly returns.
It is imperative to invest in stocks providing at least an annual growth of 5% to 15% with dividends.
There is no doubt that it will be a solid approach for any investor.
Which sectors provide the highest dividend-paying stocks in India?
It is not feasible for a company or a shareholder to accelerate your dividend returns overnight.
Here, we will look at some of the top dividend stock sectors in India that can provide high dividend yields.
• Telecommunications: Companies providing internet and telephonic services come with high dividend returns.
• Utilities: Suppliers of electricity, water, and natural gas provide consistently high dividend yields depicting a powerful stable dividend history.
• Real Estate: REITs (Real Estate Investment Trusts) allocate their profits among shareholders to maintain the safety of the tax status. Consequently, it might result in higher dividend yields.
• Consumer Staples: Companies providing branded consumer essentials such as beverages, food, household goods, and hygiene provide long-lasting dividend returns as well.
• Energy Generation: Energy infrastructures such as master limited partnerships generating and supplying energy provide dividend yields of 6% to 7%.
Below, we have mentioned a list of several highest dividend-paying stocks in India:
| Company Name | Dividend yield during the last 12 months | Stock price changes during last 12 months |
|---|---|---|
| Vedanta Ltd. | 26.5% | -0.85% |
| RECL | 16% | -19.56% |
| INEOS Styrolution India Ltd | 34% | -40.28% |
| PFCL | 11.33% | -24.88% |
| IOCL | 16.8% | -22.13% |
| BEL | 4.25% | 54.93% |
| NMDC | 11.1% | -8.25% |
| SAIL | 10.6% | 29.47% |
| Union Bank of India | 4.13% | 1.77% |
| NTPC | 4.19% | 10.41% |
Here are the top 3 dividend stocks in India:
1. INEOS Styrolution India Ltd.
INEOS Styrolution India Ltd. has paid out ₹297 dividends during the last year, and its share price is presently at ₹875.
Therefore, this company has an almost 34% dividend yield.
The share price of this business has dropped by 40.28% during the last year.
2. Vedanta Ltd.
This company provided ₹77.5 as dividends during the previous year.
Moreover, the current share price of Vedanta stands at ₹292.55. Thus, it enjoyed a dividend yield of 26.5% in 2022.
Nevertheless, its stock has not given much returns with a drop of 0.85% during the previous one year.
3. Indian Oil Corporation Ltd.
This company’s dividend yield stands at 16.8% while that it paid a ₹11.4 dividend during the previous 12 months and now its share price happens to be ₹67.85. However, we like to mention that the stock price of Indian Oil Corporation has dropped by as much as 22.13% during the previous one year.
