Highest Dividend Paying Stocks in India

The highest dividend-paying stocks are ideal for investors seeking regular income. These companies distribute profits as dividends instead of reinvesting for aggressive growth, making them stable but slower-growing compared to growth stocks. Commonly found in industries like energy, oil, and natural resources, often dominated by government-linked companies, these stocks offer a dual advantage of reliable income and moderate capital growth.

Investors can also reinvest the dividends to boost their overall capital growth. While the Indian stock market offers a range of opportunities, the highest dividend-paying stocks from well-established companies stand out for consistent returns. However, investors should consider tax implications, such as the 10% TDS on dividends exceeding Rs. 5,000 annually, which can be claimed as a credit when filing income tax returns.

• The highest dividend-paying stocks offer consistent income, typically from large-cap companies with stable operations.
• These companies prioritise paying out profits as dividends instead of reinvesting, which often leads to moderate growth compared to high-growth stocks.
• Many of the dividend-paying companies belong to capital-intensive sectors like energy, oil, and natural resources.
• Investors should be aware of tax implications, including a 10% TDS on dividends exceeding Rs. 5,000 per year.

Here are some of the highest dividend-paying stocks that investors may want to consider adding to their portfolios in 2024. The table below highlights key metrics, and we will delve into a more detailed discussion of each stock in the following section.

Note: The data and metrics presented above are current as of August 30, 2024.

Having identified the highest dividend-paying stocks to consider in 2024, let us take a closer look at these companies and their robust market standings:

1. Indian Oil Corporation (IOC)

Indian Oil Corporation Ltd., a Maharatna company, is a leader in the oil refining and petroleum marketing industry. It plays a pivotal role in India's hydrocarbon value chain, covering oil refining, pipeline transportation, and petroleum product marketing. The company also delves into alternative energy sources and petrochemicals. In the last five years, IOC has shown a 19.15% annual net income growth, outpacing the industry average of 17.55%, making it one of the most reliable dividend-paying stocks in India.

2. Vedanta Ltd.

Vedanta is a diversified natural resources company that explores and processes minerals such as zinc, silver, lead, and oil and gas. The firm has operations in several countries, including India, South Africa, and the UAE. Vedanta's revenue has grown at a yearly rate of 9.26%, higher than the industry average. Its steady dividend payouts and strong presence in essential commodities for decarbonisation make it an attractive option for 2024.

3. Bharat Petroleum Corporation Limited (BPCL)

BPCL is a government-owned oil and gas company, though there have been ongoing plans to privatise it. BPCL operates an extensive network of refineries, depots, and retail outlets, making it the second-largest oil company in India. Over the past five years, BPCL's net income has grown by 28.05% annually, making it an excellent dividend-paying stock for those seeking stable returns in 2024.

4. Coal India Ltd. (CIL)

Coal India, another Maharatna PSU, is the world's largest coal producer and operates across 83 mining areas in India. Primarily supplying power and steel industries, the company aims to drive sustainable growth with a focus on the energy sector. As one of the highest dividend stocks, CIL offers a stable income for investors with a long-term horizon, making it a key player in India’s energy landscape.

5. Oil and Natural Gas Corporation (ONGC)

ONGC is India’s largest crude oil and natural gas producer, contributing to about 70% of the nation’s crude oil and 84% of its natural gas. The company supplies to downstream firms like IOC and BPCL, which convert crude oil into petroleum products. With a 14.73% return on equity, ONGC continues to be a dominant player in India's energy sector and the highest dividend-paying stock for investors seeking stable returns.

In 2024, India’s highest dividend-paying stocks present a compelling opportunity for investors seeking steady income with minimal volatility. These companies, primarily large-cap corporations in energy, oil, and natural resources, offer a balance between reliable dividends and moderate growth. However, investors should also consider associated risks and tax implications. As always, conducting thorough research or consulting a financial advisor is advisable before making any investment decisions.