In a few months from now, investors will begin receiving dividends, while some companies would also be declaring interim dividends later this month and in Feb. Most of the commodity shares in India tend to have a high dividend yield, because of the low prices they trade at. Typical examples are Coal India, NMDC, Oil India and ONGC.

Top Dividend Paying Shares In India

Oil India

Oil India is a play on crude oil. When crude oil prices climb, the shares of Oil India rally. The company last year declared a dividend of 200 per cent or Rs 20 per share last year. This takes the dividend yield to around 5.11 per cent at the current market price of Rs 391.

The one reason why Oil India may also be a good bet is because the shares are a proxy for crude oil prices. In fact, crude oil prices have slumped to a 11 year low of $32 a barrel. We do not see crude oil falling below $30. On the other hand any geo-political tensions could see a huge spike in crude prices, which could lead to a sharp rally in Oil India shares. Until then, you can keep reaping the rewards of a steady dividend.

Canara Bank

Canara Bank is another stock that offers good dividend yield. Apart from dividend yield the shares of Canara Bank are a good bet for a number of reasons. One is that the stock has hit a 52-week low and is available at very low levels.

The second is that fundamentally, the stock is much better than other PSU banking peers, especially when it comes to non performing assets. Third and the most important reason to buy Canara Bank shares is the fact that at some stage economic recovery is likely to gather pace, which could lead to improvement in credit growth and lower NPAs.

The stock is currently trading at Rs 222, offering a superb dividend yield of almost 5 per cent. An attractive stock for dividend yield as well as investment purposes.

NMDC

NMDC like Oil India is a bet on the commodity space, as the company mines iron ore. If commodity prices rally, be rest assured that the share price of NMDC would also rally. The last dividend declared was Rs 8.55 per share, which takes the dividend yield to near 10 per cent on a share price of Rs 88.

This is a cash rich company and again a great proxy on the iron ore space. The stock recently fell to a 52-week low sparked by growth worries in China. The shares are a great pick, if global growth recovers, which could push the share price higher. Until then you can keep enjoying high dividends from the company.

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