There are plenty of stocks that offer high dividend yield in India. However, you need to also make sure that they are not one time dividends and also these companies have a consistent track record of paying dividends. We have picked 5 stocks that are high on dividends and fundamentally sound in India.
Bharat Petroleum is an excellent stock for a number of reasons, including its very high dividend yield of near 5 per cent. The company has improved operating efficiencies tremendously in the last few years and its Return On Equity is a superb 24 per cent. At the current market price of Rs 646 the dividend yield works to about 4.6 per cent. The company which refines crude oil into petroleum products is benefiting from expansion and the doing away of subsidies. With crude oil likely to continue to remain low, we believe that BPCL would be a major beneficiary. Check stock quote of BPCL here
Rural Electrification Corporation
This is another stock that you should buy not only for very high dividend yield, but, also on account of a host of factors. Among these include a p/e ratio of less than 6 times and a book value of less than 1. This makes Rural Electrification a stock to buy not only for dividends, but also because of its sound fundamentals. In this market, when most stocks are quoted at hefty valuations you cannot find good quality stocks. So, buy the above which are some he best dividend paying stocks in India also with sound fundamentals. The dividend yield on the stock is 5.4 per cent. Check stock quote here
HPCL is another refinery company like BPCL, which has an excellent dividend paying track record. The company has already declared dividends twice this year. It first declared a dividend in Feb of Rs 22.50 per share and has now declared a dividend of Rs 6.4 per share in March. What this means is that if you buy the share at Rs 500, you get a cool yield of 6 per cent. This has to be among the more consistent and high paying dividend stocks to buy. Fundamentally there is nothing wrong with the share. We believe crude prices would stay lower for some more time, making HPCL a good stock to buy. Check stock quote of HPCL here
This again is a stock that has been declaring dividends consistently in the past and there are hopes that we would see more to come. At the current market price of Rs 296 the stock yields a dividend of near 5 per cent. However, this year the company declared a slightly lower dividend then last year. Though we do not expect that to happen this year as the company's performance is likely to remain steady on account of higher demand for coal. We believe that just like some of its other PSU peers in the oil marketing space, Coal India also remains one of the best bets for the best dividend yields in India.
This is another good stock to buy for a great dividend yield. Power Finance is one of the largest Power Financiers in the country. The company has a good and consistent track record of paying dividends. This has led to it reporting a good set of results. In fact, in 2005 the company paid a total dividend of Rs 9.4 per share, though the dividends have been a little inconsistent in the past. Nonetheless, the stock is a good play on dividends, though there could be some problems with consistency.
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