Over 20% Dividend Yield: Vedanta, Coal India, Hindustan Zinc In Top 10 Dividend Stocks On BSE 200; Check List!

Dividend-paying stocks have broadly witnessed a bullish trend in the current year so far. The dividend indexes on both BSE and NSE have given double-digit returns, outperforming even benchmarks like Sensex and Nifty. That being said, there are top 10 dividend stocks in a mixture of both largecaps and midcaps on BSE 200 that have the highest dividend yields, at a staggering over 20% yield!

On December 15th, the BSE Dividend Stability Index which has a total of 62 dividend stocks under its list, touched an all-time high of 828.1 before ending at 827.39, up by 1.34%. This index has given nearly 33% returns year-on-year. Meanwhile, as per NSE data, the Nifty Dividend Opportunities 50 index also hit a new lifetime high of 5,322.75, and has given over 37% year-on-year returns. This is better than returns of 15-17% from Sensex and Nifty in a year.

With the BSE 200 index measuring the performance of the top 200 companies listed, based on size and liquidity across sectors, here is the list of top 10 dividend-paying stocks and their yields.

1. Vedanata:

On an expected line, metals and mining major Vedanta has topped the list with a dividend payout of up to Rs 51.50 per and a dividend yield of 20.02% in 2023 so far. Not only that this dividend king is also planning to announce a second interim dividend on December 18, for the financial year 2023-24.

2. Hindustan Zinc:

Following the footsteps of its parent Vedanta, Hindustan Zinc has so declared dividends up to Rs 52 per share and has a dividend yield of 16.44%. At the latest, the stock turned ex-dividend just last week on December 14th for a second interim dividend of Rs 6 per share or 300%.

3. Coal India:

Competing against the private metals and mining biggies, Coal India takes the third highest dividend yield stock but also is the highest dividend yield stock in PSUs. This largest government-backed coal producer in the world paid dividends up to Rs 24.50 per share and has a dividend yield of 7% currently.

4. Indian Oil Corporation:

IOCL is the highest dividend yield stock in oil marketing companies (OMCs). IOCL pays up to Rs 8 per share dividends and holds a yield of 6.46%.

5. Oil India:

Oil India, a CPSE engaged in the exploration, development and production of crude oil and natural gas, has paid dividends up to Rs 19 per share and has a dividend yield of 5.88% currently.

6. Bharat Petroleum Corporation Limited:

BPCL is another leading and government-backed OMC. The company paid a total dividend of up to Rs 25 per share in 2023 so far, and currently has a dividend yield of 5.57%.

7. Oracle Financial Services Software:

Oracle Financial is the highest dividend yield stock in the IT sector, with yields to the tune of 5.16%. The financial and insurance technology company has paid total dividends up to Rs 225 apiece.

8. Oil & Natural Gas Corporation:

Leading government-backed ONGC had paid dividends up to Rs 10.25 apiece in 2023 so far. Its dividend yield is currently at 5.10%.

9. Power Grid Corporation:

Maharatna company, engaged in the transmission of bulk power across different states of India, delivered dividends up to Rs 13.75 per share and at present holds a dividend yield of 4.77%.

10. Petronet LNG:

Yet another PSU under the oil & gas sector. The company which is engaged in importing liquefied natural gas and setting up LNG terminals in the country, has delivered dividends of about Rs 10 per share. Its dividend yield is at 4.67%.

Is It Worth Investing In Dividend Yield Stocks?

According to Angel One's website, a Dividend yield is used to measure a company's performance: Investors compare dividend yields of different companies to decide between buying a stock. Investors also look at forward dividend ratios and trailing dividend ratios to understand a company's dividend yield.

The brokerage further added that Investors often ask what is a good dividend yield. One needs to understand that dividend yield varies across sectors and industries. Some industries like IT or electronics have minimal dividend yields, while companies in the PSU or public sectors may have stable dividend yields.

However, it also needs to be noted that not neccessarily the stocks with high dividend yield are best bets. Angel One's note highlighted that a higher dividend yield does not always make a company an attractive investment opportunity. This is because the dividend yield will go up as stock prices decline. In cases when the price of a stock is falling rapidly, the dividend yield may look abnormally high. Such a scenario is known as a 'value trap'. In such a situation, the stock of the company may not be a good buy.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author nor 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.