Top 5 Dividend-Yielding Stocks in India, That Every Investor Should Own
Ever wondered why some people prefer to invest in stocks rather than keep their money secured in banks or FDs? Well, I will tell you why, by investing in stocks, shares, or other securities, one can increase the value of their holdings. This can add up to significant savings and increased financial security over time. Idle money left in lockers or bank accounts may not serve the purpose of future uncertainties. There’s a saying in India, “Paise se hi Paisa Banta hai,” and the stock market is one such place where one can build a fortune after careful observation and learning the pattern of the growth of a company.
What are shares, and how do they work?
In simple words, shares are the smallest unit of a company. When you buy shares of a company, you buy some percentage of ownership in the organization. Companies sell the shares in order to raise funds. With the growth of the company, the price of shares fluctuates, which helps you earn a profit when you sell shares at a high price. But there is one more way to earn from stocks, and that is through dividends.
What are dividends, for example?
Dividends are the share of profit that a company has earned. Many companies tend to share company profits with their shareholders; this payout is called a dividend. For example, you have bought 1000 shares of X company. X company decided to share its quarterly or yearly profit with the shareholder and announced a dividend of Rs. 10 per share. So now, as a shareholder, you’ll get Rs. 10,000.
Dividend-paying stocks are a crucial component of many investors’ portfolios, offering a steady income stream alongside the potential for capital appreciation. In India, several companies have a track record of consistently providing attractive dividends to their shareholders.
Here are some of the top dividend-paying stocks in the Indian market.
Hindustan Zinc Limited (HZL): HZL, a subsidiary of Vedanta Limited, is one of the world’s largest integrated producers of zinc, lead, and silver. With a strong financial position and a history of consistent performance, HZL has rewarded its investors with regular dividends.
Hindustan Zinc Ltd. declared a dividend of ₹75.50 in the previous financial year (FY2022-2023).
Vedanta Limited: Vedanta is one of the world’s foremost natural resources conglomerates, with primary interests in aluminum, zinc-lead-silver, oil and gas, iron ore, steel, copper, power, ferro alloys, nickel, semiconductors, and glass.
In the financial year 2022–23, the dividend declared by Vedanta Limited is ₹101.50.
Tata Consultancy Services (TCS): As a leading global IT services and consulting company, TCS has demonstrated a commitment to shareholder value through regular dividend distributions. Its stable financial performance and global presence make it a reliable choice for income-oriented investors.
Previously, TCS declared a final dividend of ₹24 per share for FY23.
Coal India Limited: Coal India, the world’s largest coal mining company, plays a pivotal role in India’s energy sector. The company’s steady revenue streams and essential role in the economy have enabled it to maintain a consistent dividend payout record.
The coal miner has given a dividend yield of 10.5 percent, with FY22 DPS at Rs 17 and FY23 DPS at Rs 24.3.
Taparia Tools Ltd. is mainly engaged in manufacturing forged articles of iron and steel, forgings and traded hand tools, and motor vehicle parts. Although it’s a penny stock, it has one of the highest dividend yields.
In the quarter ending March 2023, Taparia Tools Ltd. declared dividend of ₹77.50
Hindustan Unilever Limited (HUL): HUL, a subsidiary of Unilever, is a household name in India with a diverse portfolio of consumer goods. The company’s strong brand presence and consistent revenue growth support its ability to distribute regular dividends.
HUL has declared dividends of ₹17 and ₹19 in the previous financial year (FY2022-2023).
In conclusion, dividend-paying stocks in India are an essential consideration for investors seeking a reliable income stream. Companies like Hindustan Zinc, Infosys, Reliance Industries, Tata Consultancy Services, Coal India, Wipro, Hero MotoCorp, and Hindustan Unilever have established themselves as reliable sources of dividend income. However, it’s crucial for investors to conduct thorough research and consider their individual risk tolerance and investment goals before making any decisions. Additionally, consulting with a financial advisor can provide valuable insights into creating a diversified and balanced investment portfolio.