1. Coal India

This stock is attractive on account of its dividend yields. Last year the company declared a dividend of Rs 13.1 per share. It is unlikely that the company would lower its dividends in 2019-20. Based on this dividend the yield at a current market price of Rs 188, turns to near 7 per cent.

It may not be a bad idea to bet on the stock, given that it has been hammered down from 52-week highs of Rs 299. In terms of safety as well, we are unlikely to see too much of a fall in the stock price of Coal India, given that it is a cash rich company, with assured business prospects.

Also, one needs to remember that dividends are tax free in the hands of investors.

2. Karnataka Bank

Karnataka Bank too has a solid track record of paying dividends for many years now. The stock is available at a near 52-week low of Rs 77.

At this market price the dividend yield on the stock works to 4.5 per cent. The bank declared a dividend of Rs 3.5 per share in 2018-19. Remember, this was at a time when most of the banking sector was reeling under bad loans and unable to manage their NPAs.

Karnataka Bank is also undervalued as a stock. The shares are trading at a price to book of around 0.40 times, which is extremely cheap for a private sector banking stock. All in all it is a good stock to buy for dividend yields.

3. IndiaBulls Housing Finance

IndiaBulls Housing tends to declare dividends about 4 times a year. Last year, it had declared a dividend of Rs 40 per share. However, it is unlikely to maintain the same dividend, given the conditions in the NBFC sector.

We believe the company may end-up paying a dividend of Rs 32 per share in the current financial year. Based on the above, at the current market price of Rs 491, the dividend yield translates to about 6.52 per cent.

Having said that, the stock of IndiaBulls Housing Finance tends to be extremely volatile. Also, in the future the movement of the stock would largely depend on an approval by the RBI of its merger with Lakshmi Vilas Bank.

4. NMDC

This is a government of India owned iron ore mining company. In 2018-19, the company declared a dividend of Rs 5.52 per share. Based on the same, the dividend yield works to around 6.94 per cent.

However, one is not certain whether the company will declare the same amount of dividend this year, given the slowdown in the Industry. However, at the current market price, there seems to be very little risk in the stock at the current market price of Rs 79.