For many investors, the amount of dividend that a company is paying is an important factor that they analyze before finalizing whether to invest in a company or not.
Dividend-paying stocks are an excellent way to invest in the stock market. Although they're not as popular as high-yield bonds, dividend-paying stocks offer investors a way to earn a steady income from their investments.
They're also known as "blue chip" stocks, because of their history of paying dividends and the fact that they tend to be bought by institutions such as mutual funds and pension funds.
Dividends need to be seen in correlation with the net profits. Some of the best dividend-paying companies use their profit judiciously. While rewarding the shareholders is good, the profit needs to be strategically reinvested in the company. This ensures growth and enables long-term wealth creation for investors.
In this article, we will mention the upcoming dividend-paying stocks and also discuss some important concepts related to dividends.
10 Highest Dividend-Paying Stocks in India
India is a country with a booming economy, and the Indian stock market has been growing at an impressive rate. However, some stocks pay dividends and are considered dividend-paying stocks.
The following list of dividend-paying stocks in India includes both large institutions and smaller companies. Most of these companies have been around for many years, which makes them an excellent choice for investors who want to invest in a well-known company that will give them steady returns over time.
Here’s a list of the best upcoming dividend-paying stocks:
S.No. | Company Name | Industry |
1. | Britannia Industries | Food |
2. | Balkrishna Industries | Tire Manufacturing |
3. | Punjab National Bank | Banking |
4. | Dalmia Bharat | Conglomerate |
5. | Polycab India | FMEG |
6. | Dr Lal PathLabs | Healthcare |
7. | Supreme Industries | Plastic Processing |
8. | Union Bank of India | Banking |
9. | Indian Hotels Company | Hospitality |
10. | Happiest Minds Technologies | IT Consulting & Services |
Factors To Consider Before Investing In Dividend Paying Stocks
Here are a few things to keep in mind about upcoming dividend-paying stocks:
What do the Ratios tell us
A very high payout or yield ratio would mean that a very less amount of profits is being reinvested. This can be derived easily from the formula. If the dividend is very high, this means the company is diverting lesser profit for reinvestment back into the business and more for dividend payouts.
Analyzing Dividends
These ratios should only be used to analyze the dividend payout situation of the company and should not be the sole reason why you are or you are not investing in a company's stock. Even the highest dividend-paying stocks can turn out to be bad investments in the future.
The Yield Ratio is Dynamic
Share market price is a dynamic figure. It may change every second of a trading session. Therefore, dividend yield could also vary.
Do Not Look at Absolute Dividend Numbers
Do not look at these numbers to make decisions. A dividend of Rs 100 per share doesn't speak high about a company. And a dividend of Rs 10 per share doesn't speak low of a company.
The highest dividend-paying stocks may not necessarily be a good investment. You need to look at the company’s earnings, the number of outstanding shares, shareholders, and other metrics. And this is where the ratios come into play.
10 Highest Dividend-Paying Stocks in India Recently: Performance Overview
1) Britannia Industries
Founded in 1918, Britannia Industries Limited is primarily involved in the manufacturing and selling of various food products. Its product portfolio includes biscuits, bread, cakes, rusk, and dairy products including cheese, beverages, milk, and yoghurt.
2) Balkrishna Industries
Balkrishna Industries Limited is an India-based company engaged in offering pneumatic tires. The Company offers tires, tubes, and tire flips. It focuses on the manufacture of a range of off-highway tires (OHT). These tires are mainly meant for agricultural, industrial, and construction, earthmover and port, mining, forestry, lawn and garden, and all-terrain vehicles (ATV).
3) Punjab National Bank
Punjab National Bank (the Bank) is an India-based bank. The Bank’s segments include Treasury, Corporate/Wholesale banking, Retail banking, and Other banking operations. The Treasury segment includes the entire investment portfolio and trading in foreign exchange contracts and derivative contracts.
The Bank provides various banking services, such as agriculture banking, retail banking, treasury operations, corporate banking, merchant banking, non-resident Indian (NRI) services, depository services, digital banking services, and mutual funds. Its depositary services include current deposits, savings deposits, term deposits, recurring deposits, Capital Gain Account Scheme, and Gold Monetization Scheme.
4) Dalmia Bharat
Dalmia Bharat Limited is an India-based cement manufacturing company. The Company is principally engaged in the business of manufacturing and selling cement and its related products and refractory products.
The Company’s products include Ordinary Portland Cement (OPC), Portland Slag Cement (PSC), Portland Pozzolana Cement (PPC), Portland Composite Cement (PCC), and other speciality cement. Its speciality cement includes sulphate resisting portland cement, railway sleeper cement, oil well cement, and special cement for airstrips and nuclear power plant construction.
5) Polycab India
Polycab India Limited is engaged in the business of manufacturing and selling wires and cables, and fast-moving electrical goods (FMEG) under the POLYCAB brand. It operates through three segments: Wires & Cables, Fast moving electrical goods (FMEG), and others. Its Wires & Cables segment manufactures and sells electric wires and cables.
Its FMEG segment is an electric consumer durable business, which consists of businesses covering electric wiring accessories and electric appliances. Its Copper segment is engaged in manufacturing, selling, and job work on copper rods and wires.
Its Other segment consists of engineering, procurement, and construction, business which includes design, engineering, supply, execution, and commissioning of power distribution.
6) Dr Lal PathLabs
Dr Lal PathLabs Limited is engaged in providing diagnostic and related healthcare tests and services. The Company is also engaged in running laboratories for carrying out pathological investigations of various branches of biochemistry, haematology, histopathology, microbiology, electrophoresis, immunochemistry, and other pathological and radiological investigations.
7) Supreme Industries
Found in 1942, Supreme Industries Limited is an India-based plastic products manufacturing company. The Company has approximately 25 manufacturing facilities spread across the country, offering a comprehensive range of plastic products in India.
Its Consumer Products division is engaged in furniture. Its Industrial Products division offers industrial components, material handling systems, pallets-roto moulded crates, pallets and garbage bins, and composite liquefied petroleum gas cylinders.
8) Union Bank of India
Union Bank of India is an India-based banking company. The Company’s segments include Treasury Operations, Corporate and Wholesale Banking, and Other Banking Operations.
The Company offers products in three categories, including personal, corporate loans, and international. Its personal products include accounts and deposits, loans, which include retail, micro, small and medium enterprises (MSME), wealth management, financial schemes, and lockers/other services.
9) Indian Hotels Company
The Indian Hotels Company Limited is a holding company. The Company is engaged in short-term accommodation activities, restaurants, and mobile food service activities.
The Company is primarily engaged in the business of owning, operating, and managing hotels, palaces, and resorts under various brands, including Taj, SeleQtions, Vivanta, The Gateway, Ginger, Expressions, ama Stays and Trails, and TajSATS. It also operates restaurants, food, and beverage business. It owns a portfolio of 232 hotels, including 61 under development globally across four continents, 12 countries, and in over 100 locations.
10) Happiest Minds Technologies
Happiest Minds Technologies Limited is an India-based digital transformation information technology (IT) consulting and services company. The Company's segments include Infrastructure Management & Security Services (IMSS), Digital Business Solutions (DBS), and Product Engineering Services (PES).
IMSS provides continuous support and managed security services for mid-sized enterprises and technology companies. It also offers solutions across the spectrum of various digital technologies.
Point to Note
These may be the top dividend-paying stocks in India. Keep in mind, that this should not be the only reason for picking a stock.
Companies may also pay dividends if they are making losses. There are a host of other factors you need to look at like profit history, business outreach, debt conditions, management quality, etc. Do your research to make an informed decision.
Happy Investing!
Disclaimer: This article is only for educational and informational purposes about Upcoming Dividend Paying Stocks. Investors are advised to invest in stocks after thorough research and based on their investment goals.
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Research Analyst - Bavadharini KS