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Investors love dividends because they provide additional returns on stock price gains. In 1988, Warren Buffet’s Berkshire Hathaway invested $1 billion in Coca-Cola shares, making up 6.2% of the company. Since then, Berkshire Hathaway has earned over $10 billion in dividends from this stock, and the investment is worth more than $24 billion as of 1st May 2024.
This exemplifies how patience pays off exponentially in an investment journey. In this article, we will discuss the top dividend stocks of India 2024 that have a reliable track record of long-term performance and offer a balance between risk and return.
What are Dividend Stocks?
Dividend stocks refer to stocks of companies that distribute a portion of their profits to shareholders. The dividend amount is as per the company’s dividend distribution policy, and the company can announce dividends multiple times during the year.
Dividend stocks usually announce interim and final dividends to their shareholders. The interim dividend is announced during the financial year when quarterly results are released, and the final dividend is announced at the end of the financial year.
If you are planning to buy top dividend stocks, pick stocks of companies with high dividend yields that are established in the market and have a steady performance track record.
Dividend Yield
Dividend Yield is a financial ratio, usually expressed as a percentage, that shows how much return an investor can expect from an investment in the form of a dividend.
Dividend Yield Ratio: (Annual Dividend / Current Share Price)* 100
Features of Dividend Stocks
- Consistent revenue generation line: Dividend stocks that issue dividends to shareholders at regular intervals are often large and established companies. Such companies have predictable revenue and earnings and prefer to reward their shareholders by issuing dividends at regular intervals.
- Sustainable dividend payouts: Dividend stocks plan their dividend payments to avoid falling behind while maintaining sufficient reserves to survive potential economic downturns.
- Lower Volatility: Dividend stocks tend to be less volatile than non-dividend-paying stocks, and the company’s ability to increase dividend payout indicates strong management and positive future prospects.
Also Read: What is CMP in the Stock Market?
Top Dividend Stocks of India 2024
- Infosys
- HCL Tech
- ITC
- ONGC
- Coal India
- Power Grid
- Hindustan Zinc
- NALCO
- IGL
- Nippon Life India Asset Management Limited
Infosys
| CMP (as of 17th May 2024) | ₹1,444 |
| Dividend Yield Percentage | 2.63% |
Infosys, the homegrown IT major, is a consistent dividend payer with one of the highest dividend yields among peers. The company usually pays out dividends twice a year in interim and final dividends.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 17.50 | 27 | 31 | 34 | 46 |
HCL Tech
| CMP (as on 17th May 2024) | ₹1,333 |
| Dividend Yield Percentage | 3.90% |
HCL Tech is one of the top five Indian IT services companies in terms of revenue and profitability. In addition to dividends, the company has provided a 15% CAGR return to its stockholders over the last ten years through stock price appreciation.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 10 | 10 | 42 | 48 | 70 |
ITC
| CMP (as of 17th May 2024) | ₹436 |
| Dividend Yield Percentage | 2.92% |
ITC is a diversified conglomerate and leading cigarette manufacturer and FMCG player in India, with more than Rs 80,000 crore in revenue. ITC has been a consistent dividend paying company and is known for its generous dividends to shareholders.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 10.15 | 10.75 | 11.50 | 15.50 |
ONGC
| CMP (as on 17th May 2024) | ₹277 |
| Dividend Yield Percentage | 4.05% |
ONGC is India’s largest oil and natural gas explorer specializing in deep sea exploration of crude oil. It contributes more than 70% to domestic crude and natural gas production. Because of the nature of the business, the dividend amount varies year after year.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 5 | 3.6 | 10.50 | 11.25 |
Coal India
| CMP (as on 17th May 2024) | ₹470 |
| Dividend Yield Percentage | 5.16% |
Coal India is the world’s single largest coal producer and ninth-largest employer in India, with revenue of Rs 1.4 lakh crore in FY24. The company has doubled its dividend payment in the last five financial years, benefiting its shareholders.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 12 | 16 | 17 | 24.25 | 25.50 |
Power Grid
| CMP (as of 17th May 2024) | ₹313 |
| Dividend Yield Percentage | 3.53% |
Power Grid is India’s largest state-owned company involved in developing and operating power transmission lines. Over the years, it has rewarded shareholders handsomely through the issuance of bonus shares and dividends.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 10 | 12 | 14.75 | 18.75 |
Hindustan Zinc
| CMP (as of 17th May 2024) | ₹590 |
| Dividend Yield Percentage | 2.2% |
Hindustan Zinc is a state-owned company that is the world’s second-largest integrated zinc producer and third-largest silver producer. The company has a good track record of rewarding its shareholders through consistent dividend payments.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 16.50 | 21.30 | 18 | 75.50 | 23 |
NALCO
| CMP (as of 17th May 2024) | ₹195 |
| Dividend Yield Percentage | 2.31% |
National Aluminium Corporation is a Navratna PSU with integrated and diversified mining, metal, and power operations. The company is primarily engaged in manufacturing Aluminium and Alumina. In 2011, the company split its shares into two with a new face value of Rs 5 and issued one bonus share for every share by the investors.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 1.5 | 3.5 | 6.5 | 4.5 |
IGL
| CMP (as of 17th May 2024) | ₹440 |
| Dividend Yield Percentage | 2.95% |
Indraprastha Gas Limited is a key player in northern India and a city gas distributor. The company was formed as a JV between GAIL and Bharat Petroleum. Although its share price has not performed well, the company has rewarded its shareholders through consistent dividend issuance.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 2.8 | 3.6 | 5.5 | 13 | 9 |
Nippon Life India Asset Management Limited
| CMP (as of 17th May 2024) | ₹593 |
| Dividend Yield Percentage | 2.78% |
Nippon Life India Asset Management Limited is a mutual fund house originally incorporated as Reliance Mutual Fund. It is one of India’s largest mutual fund houses, managing more than Rs 4 lakh crore of investors’ money. The fund house has showcased its prowess in successfully managing users’ funds and creating value for shareholders.
| FY20 | FY21 | FY22 | FY23 | FY24 | |
| Dividend/Share (₹) | 5 | 8 | 11 | 11.50 | 16.50 |
Benefits of Dividend Stocks
The following are the benefits of holding dividend stocks:
Passive Income Source: Dividends are a form of passive income, meaning the income you don’t have to do much labor to earn. Most dividend stocks pay out dividends quarterly or semi-annually, thus offering a consistent source of passive income.
Enhanced Returns: When dividends are reinvested, they increase the total return on investment and allow for compounding effects. Thus, you can earn returns on the original investment and the reinvested dividends.
Equity Evaluation: Dividend-paying stocks offer an extra metric for fundamental analysis. Any drop in dividend payout percentage can indicate initial signs of financial stress in the company. Regular dividend payment indicates management’s confidence in the company’s future profitability and growth.
Investing in top dividend-paying stocks offers a steady source of income and an opportunity for long-term growth. Apart from the stocks discussed here, the Indian stock market offers many dividend stock options across various sectors. Dividend stocks are often fundamentally sound companies with consistent performance records.
*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
FAQs
What are dividend stocks?
Dividend stocks are stocks of companies that regularly pay out a portion of their profit in cash to shareholders. Shareholders consider dividend stocks attractive as they offer a steady income source.
How to pick top dividend stocks?
Top dividend stocks often have high dividend yield ratios and have a history of increasing dividend payouts to investors over time.
Is it good to hold dividend stocks for the long term?
Yes, holding top dividend stocks is good for the long term as they offer a steady source of income, long-term growth opportunities, lower volatility, and an indication of the company’s good financial health.
I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
