5 Highest Dividend Paying Stocks in Nifty 50

Last Updated on Dec 28, 2023 by Anjali Chourasiya

High dividend-paying stocks in India in 2023

Note: We have used Tickertape Stock Screener to get the best dividend-paying stocks in India. The information is dated 27th December 2023 and is based on the following parameters:

  • Market cap: Large
  • Dividend Yield: High – Sort from highest to lowest
  • 5-yr Return on Investment (ROI): High

A brief on the filters used to discover the best highest dividend-paying stocks in India

Dividend Yield: The ratio is calculated as dividend per share (DPS) for the most recent fiscal year divided by the close price of the stock. A dividend is a portion of the company’s profit paid to shareholders. Dividend per share (DPS) refers to the total dividend paid out divided by the company’s common stock.

The ratio is used to calculate the earnings on investment, considering only dividends declared. The higher the dividend yield, the better.

Return on Investment: Return on Investment is defined as net income divided by the average of shareholders’ equity, long-term debt and other long-term liabilities for the most recent financial year. ROI is an efficiency indicator that helps understand the number of units of income earned for every Rs.100 investment. A company’s current ROI can be compared with its historical returns, and the ROI of companies operating in the same sector can also be compared with each other.

5Y average return on Investment is the average ROI for the most recent five financial years. 

Details of the top 3 highest dividend-paying stocks

Hindustan Zinc Ltd

India’s largest and world’s second-largest zinc-lead miner, Hindustan Zinc Ltd’s operations comprise lead-zinc mines, hydrometallurgical zinc smelters, lead smelters, pyro metallurgical lead-zinc smelters as well as sulphuric acid and captive power plants in northwest India. As of 27th December 2023, its market capitalisation was Rs. 1,31,808.83 cr. Here’s a bit of the stock’s financials and performance.

  • As per the Tickertape Scorecard, the stock is showing good signs of profitability and efficiency. However, it lags in terms of growth and performance and has a moderate number of red flags.
  • Over the last 5-yr, the debt-to-equity ratio has been 26.3%, vs the industry average of 20.47%, and the current ratio has been 305.45%, vs the industry average of 295.54%. 
  • In the last 5-yr, the company has seen free cash flow growth of 10.39%, vs the industry average of 11.94%.  
  • The company has an expected revenue growth of -13.69% for next year, less than the last 3-yr CAGR revenue growth of 20.07%.
  • Lastly, the stock is underpriced and is not in the overbought zone.

Analyse it further here


Tech Mahindra Ltd

Incorporated in 1986, Tech Mahindra Ltd is engaged in the business of computer programming, consultancy and related services. Its segments include Information Technology (IT) Services and Business Processing Outsourcing (BPO). As of 27th December 2023, its market capitalisation was Rs. 1,24,963.69 cr. Let’s have a look at the stock’s financial performance.

  • Over the last 5-yrs, the debt-to-equity ratio has been 11.37%, vs the industry average of 13.63%, and the current ratio has been 209.12%, vs the industry average of 228.38%. 
  • In ‘Forecasts’, the stock has an expected earnings growth of -37.52% for next year, which is more than its last 3-yr CAGR earnings growth (6.23%). 
  • The expected revenue growth for the next year is 4.37%, less than the last 3-yr CAGR revenue growth of 12.54%. Further, the expected return from the stock is -13.68% from the current price level, which is less than the last 3-yr CAGR of 17.95%. 
  • As per the Tickertape Scorecard, the stock is showing good signs of profitability and efficiency. However, the stock is lagging in terms of valuation, growth and performance. The stock has no red flags.
  • Lastly, the stock is overpriced but is not in the overbought zone.

Analyse the stock based on your preferred parameters here. Choose from over 200 filters and create your custom universe!

ITC Ltd

Incorporated in 1910, ITC Ltd is  a fundamentally strong company known for its tobacco business. The company has a presence across industries like hotels, FMCG, packaging, paperboards, software, speciality papers and agribusiness. As of 27th December 2023, the company’s market capitalisation was Rs. 5,70,260.07 cr., the highest in this list. Here’s a brief about the stock’s financial performance.

  • Over the last 5-yrs, the free cash flow growth has been 9.41%, vs the industry average of 8.17%. For the same period, the debt-to-equity ratio has been 0.35%, vs the industry average of 0.78%. 
  • The expected earnings growth of 7.95% for next year is less than the last 3-yr CAGR earnings growth of 7.54%. 
  • An expected revenue growth for the next year is 0.47%, less than the 3-yr CAGR revenue growth of 11.98%. Further, a return of 9.93% from the current price level is expected, which is less than the last 3-yr CAGR of 24.49%. 
  • As per the Tickertape Scorecard, the stock is showing good signs of profitability and efficiency. However, the stock is lagging in terms of valuation, growth and performance. The stock has no red flags.
  • Lastly, the stock is overpriced but is not in the overbought zone.

Analyse it further here.

What are high dividend yield stocks?

A company utilises its profits in two ways – reinvest it into the business and share it with shareholders in the form of dividends. A high dividend yield stock is a company that pays a high dividend to its shareholders. It is considered a good investment because a high dividend yield indicates that the stock is undervalued/underpriced by the market, and dividends are a good source of passive income. 

Factors to consider when investing in the highest dividend-paying stocks

  1. Yield ratio: A high yield ratio indicates that the company is reinvesting very little amount back into the business and paying more to the shareholders. Hence, always do a deeper analysis of the company’s financials before investing.
  2. Risk: High dividend-paying stocks are usually considered safer than other growth stocks. The reason behind this is when there is a sudden market crash or decline, high dividend-paying stocks do not lose their value. These stocks also help in diversifying the risk potential. However, consider your risk appetite before investing.
  3. Fundamentals: Investing in a company because of a high dividend payout can be fatal for your portfolio in the long run. Hence, it is wise to analyse the company for its fundamentals instead of looking at a high dividend yield.

Benefits of investing in high dividend yield stocks

Here are a few benefits of investing in stocks that pay dividends:

  • They are a great source of passive income.
  • You can reinvest dividends.
  • They are less risky than other stocks.
  • They are less prone to market volatility.

Best highest dividend-paying stocks in India in September 2023

Name Sub-Sector Market Cap (Rs. in cr.) Close Price (Rs.) PE Ratio Dividend Yield (%) 5Y Avg Return on Investment (%)
Hindustan Zinc Ltd Mining – Diversified 1,36,689.07 323.50 13.00 23.34 26.16
GAIL (India) Ltd Gas Distribution 80,676.47 122.70 14.37 4.07 13.13
HCL Technologies Ltd IT Services & Consulting 3,33,695.94 1,232.50 22.47 3.90 20.26
Tech Mahindra Ltd IT Services & Consulting 1,22,525.96 1,256.75 25.36 3.59 17.56
ITC Ltd FMCG – Tobacco 5,45,572.88 437.50 28.43 3.53 23.63
Bajaj Auto Ltd Two Wheelers 1,31,211.57 4,637.15 21.65 3.02 20.82

Note: The information is dated 5th September 2023. We have listed the ten best stocks that pay the highest dividend in India based on the following parameters:

  • Market cap: Large
  • Dividend Yield: High – Sort from highest to lowest
  • 5-yr Return on Investment (ROI): High

For this purpose, we have used Tickertape’s Stock Screener and applied the above filters.

Best dividend-paying stocks in India in 2022

Wondering what the top dividend-paying stocks in India in 2022? Here’s the list of such stocks as of 25th November 2022. 

Name Market Cap (Rs. in cr.) Dividend Yield (%) 5Y Avg Return on Investment (%)
GAIL (India) Ltd 59,701.90 7.44 13.93
Hindustan Zinc Ltd 1,27,203.23 5.98 22.72
Indus Towers Ltd 54,092.19 5.48 16.77
Tata Steel Ltd 1,28,810.34 4.84 12.04
Bajaj Auto Ltd 1,02,086.77 3.97 20.79
Tech Mahindra Ltd 1,01,638.70 3.89 17.89
HCL Technologies Ltd 2,98,728.46 3.82 20.69
Hero MotoCorp Ltd 53,131.91 3.57 22.68
ITC Ltd 4,21,702.68 3.36 22.42
JSW Steel Ltd 1,73,120.33 3.02 13.26

Note: We have listed the ten best stocks that pay the highest dividend in India based on the following parameters on the Tickertape Stock Screener:

  • Market cap – Large
  • Dividend Yield – High
  • 5-yr Return on Investment (ROI) – High

Conclusion

High dividend-yielding stocks indicate companies with financial stability. It also shows that the company is sustainable and its stock can give good returns over time. Refer to the list of the best, highest dividend-paying stocks mentioned in this article when you are curating your investment/financial plan. On that note, it is always worthwhile to consult a financial advisor while doing this. Happy Investing!

FAQs

  1. What are dividends?

Dividends are part of the profit that shareholders earn on their shares for being part owners of the company. It can be paid in cash, stock, or other forms. 

  1. What are the top stocks that pay dividends?

The top dividend-paying stocks in India are:

  1. Hindustan Zinc Ltd
  2. Tech Mahindra Ltd
  3. ITC Ltd
  4. GAIL (India) Ltd
  5. HCL Technologies Ltd

These stocks are filtered using a 5-yr Average Return on Investment and Dividend Yield on Tickertape Stock Screener. The data is from 27th December 2023.

  1. When do stocks pay dividends?

Dividends are usually a part of the profit that the company shares with its shareholders. Hence, they are declared quarterly after a company finalises its income statement. 

Anjali Chourasiya
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