4-7% Dividend Yields: Top 10 Dividend Yield PSU Stocks To BUY; Coal India, GNFC, Power Grid, RITES In List

Dividends are just like incentives that listed companies share from their net profits in a respective financial year. When investing in dividend-paying stocks, dividend yields are one of the key factors to look out for. Religare Broking has released a list of 10 PSU stocks that currently have the highest dividend yield in the segment to own. The brokerage said investors interested in dividend income, can consider these ten PSU stocks for investment.

In its research note, Religare Broking said, "Dividend yield is one of the main factors to consider when investing in dividend-paying stocks." The brokerage explained that dividend yield is an indicator of the return that the investors are earning on their shares.

Accordingly, Religare's note said, "We have filtered the list of top dividend-paying companies based on their fundamental strength and selected 10 stocks. Investors, interested in dividend income, can consider these stocks for investment."

Here is the list of 10 PSU stocks that have highest dividend yield as of now by Religare Brokerage:

1. Coal India:

The largest government-backed coal producer in the world has once again topped the list of highest dividend yield PSU stock. The company has a dividend yield of 6.4%, the highest among others. The company's dividends per share which were announced in 2023 but adjusted for FY23 as per the corporate actions, was to the tune of Rs 24.3 per share, higher from Rs 17 per share in the previous fiscal. It has price-to-equity (P/E) ratio of 8.9x.

2. ONGC:

Leading oil and gas explorer of the country, ONGC took second place for the highest dividend yield up to 5.5% currently. The company paid dividends up to Rs 11.3 per share in FY23 versus Rs 10.5 per share. Its P/E ratio is at 4.9x.

3. Oil India:

Another CPSE engaged in the business of exploration, development and production of crude oil and natural gas, Oil India with a dividend yield of 5.4% took the third rank. The company paid dividends of about Rs 20 per share by the FY23 end, higher from Rs 14.3 per share by FY22. Its P/E ratio was at 4x.

4. Power Grid Corporation:

Engaged in the transmission of bulk power across different states of India, Power Grid has a dividend yield of 4.5% as of December 29, 2023. At fourth rank, the company however paid dividends up to Rs 10.7 per share in FY23 which was lower from Rs 14.8 per share payout in FY22. Its P/E ratio is at 10.3x.

5. Petronet LNG:

Govt-backed importer of LNG terminals, Petronet LNG at fifth rank had a dividend yield of 4.5%. It paid dividends up to Rs 10 per share in FY23, which was slightly lower from Rs 11.5 per share payout in FY22. The stock's P/E ratio was at 10.6x as of December 29.

6. Gujarat State Fertilizers & Chemicals:

This Gujarat state stock's dividend payout increased sharply to Rs 10 per share by FY23, from merely Rs 2.5 per share payout in FY22. As of December 29, the stock's dividend yield was at 4.1% and P/E ratio at 3.7x.

7. PTC India:

India's leading power trader, PTC has paid dividends up to Rs 7.8 per share by FY23-end, which was the same as the payout in FY22. The stock's dividend yield and P/E ratio stood at 4.1% and 6.8x by the end of 2023.

8. RITES:

Railways-backed stock price has the highest P/E ratio among the top 10 dividend yield stocks, at a staggering 16.1x. The company also paid hefty dividends of up to Rs 20.5 per share in FY23, higher than Rs 17 per share in FY22. Its dividend yield also stood at 4.1%.

9. Gujarat Narmada Valley Fertilizers & Chemicals:

Fertilizers manufacturer, GNFC has paid the highest dividend value up to Rs 29.5 per share by FY23, a significant rise from the payout of Rs 10 per share in FY22. Its dividend yield and P/E ratio were at 3.9% and 5.4x by 2023-end.

10. Chennai Petroleum Corporation:

Although this oil and gas stock price has the lowest P/E ratio among the top 10 PSU stocks, it recorded the highest rise on a year-on-year basis in terms of dividend payout. The company paid dividends up to Rs 27 per share by FY23-end, which was mind-bogglingly higher from a meagre Rs 2 per share payout in FY22. Also, its dividend yield and P/E ratio were at 3.9% and 1x respectively by the end of December 2023.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.