Top 5 High Dividend Yield Stocks to invest in India

Top 5 High Dividend Yield Stocks to invest in India-minTop 5 High Dividend Yield Stocks to invest in India


There are several good stocks in India. However, investing in stocks during volatile markets is tough. Here comes High Dividend Yield Stocks. High Dividend Yield Stocks are those which has been providing good dividends in the past few years along with stock returns. These stocks provide stability to your stock market portfolio especially during volatile stock markets. However, identifying high dividend yield stocks is not that easy. Several experts provide key parameters in identifying Why should you invest in High Dividend Yield Stocks in India? How to identify Top Dividend Yield Stocks to invest in India in 2018? Which are the Top 5 High Dividend Yield Stocks to invest in India?

Also Read: Top 10 Liquid Mutual Funds for 2018 to invest idle money

Why should you invest in High Dividend Yield Stocks in India?


There are several reasons why you should invest in such high dividend yield stocks.

1) These stocks provide good cushion when stock markets are volatile.

2) These stocks provide good dividends which are tax free.

3) These stocks provide high and stable stock price appreciation.

How we identified Top 5 High Dividend Yield Stocks to invest in India?


It is not that simple to identify such stocks; however we have used below parameters to filter these stocks.

1) We have filtered stocks that provided sustained dividend per share (DPS).

2) We have filtered stocks that have been providing high dividend payout between 20% to 35%. If any company is paying out higher dividend means, they would not be able to utilize such funds for company expansion. Hence we have excluded stocks that are providing dividend payout > 35%.

3) We have filtered stocks that are providing dividend yield of more than 3.5% per annum. In simple terms, we filtered stocks that are providing  3.5% to 7.7% returns on your investment. These are compared to bank FDs where you might be getting 5% post tax returns (especially who are in 30% tax bracket) from such FDs. In this case, you are getting tax free dividends.

Top 5 High Dividend Yield Stocks to invest in India


Here are the high dividend yield stocks along with their dividend payout ratio, dividend yield, their current stock price and 52 week high/low which would be easy for investors to take a decision to invest in such stocks.

1) Rural Electrification Corporation – Dividend Payout 30% – Dividend Yield 7.7%


Rural Electrification Corporation Limited is a public Infrastructure Finance Company in India’s power sector. The company finances and promotes rural electrification projects across India.

Its Dividend per share is Rs 9.7.

Its earnings yield is 11.2%.

Its Price to Earnings (P/E) ratio is 4.8.

Its dividend payout ratio is 30% in the last few years.

Its dividend yield is 7.7%.

Its current market price is Rs 127. Its 52-week low share price is Rs 120 and 52 week high share price is Rs 224.

2) PTC India Financial Services – Dividend Payout 28% – Dividend Yield 5.6%


PFS majorly provides fund based / non-fund based financial assistance in the form of debt or structured debt instruments, taking into account the need of the promoter/borrowing company, condition of the financial markets, risks and rewards from the project and regulatory requirements

Its Dividend per share is Rs 1.5.

Its earnings yield is 10.7%.

Its Price to Earnings (P/E) ratio is 7.1.

Its dividend payout ratio is 28% in the last few years.

Its dividend yield is 5.6%.

Its current market price is Rs 26. Its 52-week low share price is Rs 24 and 52 week high share price is Rs 51.

3) Hindustan Petroleum Corporation – Dividend Payout 35% – Dividend Yield 5.6%


Hindustan Petroleum Corporation Limited is an Indian state-owned oil and natural gas company with its headquarters at Mumbai. It has about 25% market-share in India among public-sector companies and a strong marketing infrastructure.

Its Dividend per share is Rs 30.

Its earnings yield is 13.8%.

Its Price to Earnings (P/E) ratio is 8.5.

Its dividend payout ratio is 35% in the last few years.

Its dividend yield is 5.6%.

Its current market price is Rs 333. Its 52-week low share price is Rs 323 and 52 week high share price is Rs 493.

4) Cosmo Films – Dividend Payout 22% – Dividend Yield 3.8%


Cosmo Films offers a comprehensive range of BOPP Films for flexible packaging, lamination, labelling and industrial applications, including speciality films such as high barrier films, velvet thermal lamination films and direct thermal printable films.     

Its Dividend per share is Rs 10.

Its earnings yield is 10.6%.

Its Price to Earnings (P/E) ratio is 7.6.

Its dividend payout ratio is 22% in the last few years.

Its dividend yield is 3.8%.

Its current market price is Rs 278. Its 52-week low share price is Rs 237 and 52 week high share price is Rs 470.

Also Read: Best Mutual Funds to save Income tax from April onwards

5) RSWM – Dividend Payout 28% – Dividend Yield 3.5%


RSWM is one of the largest manufacturer and exporter of synthetic and blended spun yarns from India.

Its Dividend per share is Rs 12.5.

Its earnings yield is 6.1%.

Its Price to Earnings (P/E) ratio is 28.

Its dividend payout ratio is 28% in the last few years.

Its dividend yield is 3.5%.

Its current market price is Rs 329. Its 52-week low share price is Rs 302 and 52 week high share price is Rs 460.

Conclusion: These are high dividend yield stocks. Now you might get a question in your mind is whether you can go ahead and invest in these stocks now. One can look for stock market correction and invest in these stocks to get higher dividends + good stock returns.

Readers, what is your view about these high dividend yield stocks?

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Suresh

Top 5 High Dividend Yield Stocks to invest in India

7 comments

  • narayana

    I just looked at first two companies REC and PTC, they are having high debt to equity ratio 4.49 and 3.13 respectively. So, why these companies are paying high divident instead of recovering from debt. Are they fundamentally good?

  • Praveen Kumar

    can u check dividend history of Coal India. They seem to be paying high dividend consistently.

  • kalyan

    what about hindustran zinc? That has a much yield as well

    • Hi Kalyan, This list is where we have high dividend yield stocks which are consistent in the last 5 years. Hence Hindustan Zinc was not fit into this list

  • Venkat

    Most of these stocks are PSUs .. they give devidend cos govt wants it.. they won't concentrate on growth of company.. they won't give good returns over long run.. 

    • Lets take a step back. Here this list is about high dividend yield with moderate returns. These are not like multibaggers. If an investor is looking for regular returns + moderate returns, they can invest in these stocks. 

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