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Dividends can be a powerful tool when used wisely by investors. They are not just a means to passive income. They are freebies from a company whose stock you hold that you can use to buy more stock!
Prominent investors like Benjamin Graham and Warren Buffet love dividend stocks for the same reasons. In fact, dividend investing is a strategy of its own that has blossomed over the past four decades. You can consult a Cube Wealth Coach or download the Cube Wealth App.
That said, the magic lies in picking the right dividend stocks. But getting started isn’t easy. That’s why we’ve put together a list of the best dividend-paying stocks in India to help you kickstart your research.
Allsec Technologies is an IT company that delivers end to end business solutions. Founded in 2000, Allsec Tech is a subsidiary of Quess Corp and has 1900+ clients worldwide including Kronos, Palette, and more.
Allsec Technologies makes it to the list of top dividend stocks because of two reasons:
1. Track Record: ALLSEC has been paying dividends since 2006.
2. Dividend Yield: ALLSEC has a dividend yield of 8.80%.
This puts Allsec Tech firmly above popular dividend shares of companies like COAL India and SAIL, which have a dividend yield of 8.45% and 6.19% respectively.
There have been a total of six dividends paid throughout Allsec Tech’s history. The first-ever dividend it paid was back in 2006 worth ₹5.00. The latest dividend paid in November 2021 was worth ₹45.00.
Q3 2022 net profit stood at ₹13.16 crores versus ₹8.87 crores same time last fiscal year. That’s a 48.37% jump. Net sales also rose by 16.08% from ₹71.69 crores in December 2020 to ₹83.22 crores in December 2021.
Power Finance Corporation is an NBFC owned by the Government of India. Founded in 1986, PFC extends monetary support in the form of leases, loans, and more for companies in the power sector.
But PFC also offers non-monetary support in the form of consultation. Power Finance Corporation is a part of this list because of three reasons:
1. Track Record: PFC has been paying dividends since 2007.
2. Dividend Yield: PFC has a dividend yield of 9.03%.
3. Security: PFC is a government-owned establishment.
PFC’s dividend yield is higher than other top energy companies like Coal India and PTC India. Their dividend yield is 8.45% and 7.82% respectively.
PFC has paid out 27 dividends since 2007, making it one of the top dividend growth stocks on the list. Its first-ever dividend was worth ₹1.00 while the last dividend was worth ₹6.00.
Here are the last 10 dividends paid out by Power Finance Corporation:
PFC’s net profit rose by 24% quarter on quarter from ₹3,963.18 crores Q3 FY2021 to ₹4,893.91 crores in Q3 FY2022. Total income also rose from ₹18,441.72 crores to ₹19,215 crores during the same period.
Indian Oil Corporation is an oil and gas company that’s owned by the Ministry of Petroleum and Natural Gas (Government of India). Founded in 1959, IOC was ranked 212th on Fortune’s Global 500 list.
Apart from India, IOC has subsidiaries in Sri Lanka, Mauritius, and the Middle East. IOC makes it to the list of best dividend stocks due to the same reasons as PFC:
1. Track Record: IOC has been paying dividends since 2001.
2. Dividend Yield: IOC has a dividend yield of 9.37%.
3. Security: IOC is a government-backed establishment.
IOC’s dividend yield is higher than PFC, Coal India, PTC India, SAIL, and several other government-owned companies bar one: REC Ltd that’s next on the list.
IOC has paid a total of 37 dividends since 2003. Its first dividend was worth ₹5.00 while its latest dividend was worth ₹4.00. In between, IOC had announced an interim dividend of ₹19.00 in February 2018.
Here are the last 10 dividends paid out by Indian Oil Corporation:
IOC’s quarterly profit stood at ₹5,861 crores in Q3 FY2022, up from ₹4,917 crores in the same quarter last year. Revenue from operations also saw a jump to ₹197,172 crores, 35% higher quarter on quarter.
REC Ltd is a finance company that operates in the power sector. Founded in 1969, REC is a PSU owned by Power Finance Corporation that is #4 on our list of top dividend-paying stocks.
REC was established to help develop the power sector in India through financial loans, leases, and non-monetary help, much like its owner PFC. The reason why REC features on this list is as follows:
1. Track Record: REC has been paying dividends since 2008.
2. Dividend Yield: REC has a dividend yield of 9.73%.
3. Security: REC is a public sector undertaking company.
REC paid its first dividend in 2008 and in total, has handed out 29 dividends. REC’s first-ever dividend was worth ₹3.00 while the latest dividend stood at ₹6.00.
Here are the last 10 dividends paid out by REC:
Net profit stood at ₹2,773.44 crores in Q3 FY2022, up by 23% from ₹2,257.96 crores year on year. Total income also jumped from Rs ₹9,089.46 crores to ₹10,070.42 crores in the same period. You can consult a Cube Wealth Coach or download the Cube Wealth App.
Fun fact: REC was known as Rural Electrification Corporation Limited until it went public in 2002.
Hinduja Global helps Fortune 500 companies and others outsource their business processes. Founded in 2000, Hinduja Global has worked with 850+ brands that include the likes of Unilever and Infiniti.
The reason why Hinduja Global ranks at the top of this list of best dividend stocks is because:
1. Attractive Dividend: Hinduja Globa’s dividend yield stands at 10.21%.
2. Track Record: Hinduja Global has been paying dividends since 2007.
3. Clientele: Hinduja Global serves top brands like Unilever.
There have been 42 dividends paid out by Hinduja Global. The company’s first-ever dividend was worth ₹5.00 while the latest dividend was worth ₹28.00.
Here are the last 10 dividends paid out by Hinduja Global:
Net sales fell by 44.89% year on year from ₹1,456.85 crores in December 2020 to ₹802.93 crores in December 2021. However, net profit rose from ₹75.38 crores to ₹163.76 crores in the same period.
A dividend growth portfolio contains stocks that pay dividends and also have the potential to generate lucrative returns. This mix of passive income and returns can allow investors to work towards financial freedom. That’s why famous investors like Warren Buffet and Benjamin Graham love dividend growth stocks.
Yes, it is possible to live off dividends. In fact, dividend investing is a strategy that’s geared towards setting up financial freedom. But you’ll have to plan well in advance, starting with your expenses and financial goals. Once this is clear, you can work on building a portfolio of dividend-paying stocks.
While “rich” is a subjective term, dividend investing has the potential to generate lucrative returns and passive income. Dividend investing is built on this principle. Dividend investors are known to accumulate stocks that pay dividends. They either reinvest it to buy more stocks or hold it in a bank account in the form of cash. The goal? Financial freedom, passive income, or more money, in general. You can consult a Cube Wealth Coach or download the Cube Wealth App.
Building a dividend growth portfolio with top dividend stocks in 2022 is a strategic approach for investors seeking a combination of regular income and the potential for capital appreciation. The selection of these stocks involves careful research, considering factors like historical dividend performance, financial stability, and market conditions. These top dividend stocks exemplify companies with a strong commitment to rewarding their shareholders with consistent payouts.
Note: Facts & figures are true as of 18-04-2022. None of the information shared here is to be construed as investment advice. Exercise caution when investing in assets like stocks, mutual funds, alternative investments, and others.
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