Dividend paying stocks are nothing but a source of passive income to me. And who doesn't like some extra money every now and then. Companies share some percent of the profit with their shareholders once or twice every year which is nothing but Dividends. And the best part of this income source is - It is Tax-Free. Yes, you heard me right. Dividends up to a total sum of Rs. 10,00,000 is tax free.
Some extra cash in your bank account is always great. And, so one should always hold some dividend paying stocks in their portfolio. There are some people who only hold dividend paying stocks and some don't hold at all. I like having a mix of all in my portfolio. Dividend to me is like taking out some profit while holding the stock. It is the additional return on top of the price appreciation. Below is the list of stocks that I, personally, hold and would recommend.
Read more: How to Open a Trading and Demat Account with Zerodha
Disclaimer: Please do your own research before making any investment move.
7 Best Dividend paying Stocks in India
- COALINDIA
Coal India is a public sector company engaged in the production and sale of coal contributing approx. 82% to the total coal production in India. It is the largest coal producing company in the world.
P/E ratio: 4.27
D/E ratio: 10.21 over the last 5 years
Revenue Growth: 4.84% yearly over the last 5 years
Net Income: 4.02% yearly over the last 5 years
Dividend Yield: 10.37% - IOC
Indian Oil Corporation Limited is the largest public sector company engaged in refining of oil and gas in India. The Company's segments include Sale of Petroleum Products, Sale of Petrochemicals and Other businesses. IOC has a decent prospects for growing its earnings and dividend.
P/E ratio: -80.39
P/B ratio: 0.74
D/E ratio: 80.18% over the last 5 years
Revenue Growth: 1.13% yearly over the last 5 years
Dividend Yield: 5.43%
Read more: Frequently Asked Questions (FAQs) about Investing - INFY
Infosys Limited doesn't need much introduction but is a company engaged in consulting business in IT outsourcing and next-generation services.
P/E ratio: 27.71
P/B ratio: 6.91
D/E ratio: 1.41% over the last 5 years
Revenue Growth: 10.52% yearly over the last 5 years
Net Income: 6.05% yearly over the last 5 years
Dividend Yield: 1.63% - ITC
ITC Limited is a multinational company engaged in the marketing of fast moving consumer goods (FMGC). The Company operates through four segments: FMCG; Hotels; Paperboards, Paper and Packaging; and Agri Business.
P/E ratio: 13.37
P/B ratio: 3.12
D/E ratio: 0.16% over the last 5 years
Revenue Growth: 5.34% yearly over the last 5 years
Net Income: 9.64% yearly over the last 5 years
Dividend Yield: 6.09%
Read more: 5 Ways To Start Investing With Low Capital in India - NMDC
NMDC Limited is a public sector company engaged in the mining of iron ore. The Government of India has 69.65% stake in the company. The Company's business segments include Iron Ore and Other minerals & services.
P/E ratio: 7.21
P/B ratio: 0.93
D/E ratio: 2.12% over the last 5 years
Revenue Growth: -3.26% yearly over the last 5 years
Net Income: -10.86% yearly over the last 5 years
Dividend Yield: 6.29% - ONGC
Oil and Natural Gas Corporation Limited is a public sector multinational energy company owned by the Government of India. The Company is engaged in the exploration, development and production of crude oil and natural gas.
P/E ratio: 7.58
P/B ratio: 0.37
D/E ratio: 42.57% over the last 5 years
Revenue Growth: 19.44% yearly over the last 5 years
Net Income: -9.87% yearly over the last 5 years
Dividend Yield: 7.61% - POWERGRID
Power Grid Corporation of India Limited is an Indian state-owned Maharatna transmission company engaged in the power transmission business with responsibility for planning, implementation, operation and maintenance of Inter-State Transmission System. It transmits around 50% of the total power generated in India on its transmission network.
P/E ratio: 8.19
P/B ratio: 1.40
D/E ratio: 240.8% over the last 5 years
Revenue Growth: 17.3% yearly over the last 5 years
Net Income: 16.99% yearly over the last 5 years
Dividend Yield: 5.78%
Source: Zerodha
The list, definitely, has a lot more than just these 7 stocks but I think these are some of the best dividend paying stocks that one can invest in. I know many of you might already hold some other dividend paying stocks. I would love to know about it. Please share your favorite dividend stock in the comments down below. And, if you have any question about any of the stocks mentioned above, please share it in the comments as well and I would be happy to answer your questions.
Happy Investing!
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