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5 Highest Dividend Paying Stocks in India for Risk Free Return

As returns on Bank’s fixed deposit and savings account are shrinking, Investing in dividend paying stocks is very good strategy for regular income. There are few stocks which has dividend yield ration more than 8% which comfortably beats return on Bank FD which is around 6%.

Why to Invest in dividend Paying Stocks ?

  • Dividend income is totally Tax Free.
  • You get cash in regular interval which you can use for further investment purpose.
  • dividend paying companies are expected to give good return in long run as they have good cash flow.

What is dividend Yield ?

It is simply a percentage return on your investment. Suppose dividend Yield of a stock is 8% and your Investment amount is Rs.100,000 then you will receive Rs.8,000 per annum as dividend amount.

Highest Dividend Paying Stocks in India

Below is the list of Highest Dividend Paying Stocks in India. I have added only stocks which has good growth potential in the long run. So that you will benefit from Capital Appreciation as well.

Sr No Company CMP Market Cap PE Dividend Yield %
1 Coal India 271 1643372 19.2 7.5
2 NLC India 94 14675 5.6 7.6
3 NHPC 27.1 28932 10.3 6.4
4 ONGC 171 212262 12.1 4.6
5 Greaves Cotton 136 3441 19.9 3.9

 

*CMP is on 2nd October 2017.

How much to allocate in Portfolio ?

It again depends on your risk taking capability. If you are low risk taker then I would suggest to allocate 20-30% to dividend paying stocks. But if you have free cash in Savings then its always better to go for these stocks.

Risk Factor ?

  • You may not get good return in short-term.
  • Divident payment is completely depends upon earnings of the company. So company might stop dividend payment in case of poor earnings.

Screener to find dividend Paying Stocks ?

There are many. I am adding few below. You can easily find out such stocks from below links.

http://www.religareonline.com/screener/equity-screener/highest-dividend-yielding

http://www.moneycontrol.com/stocks/marketstats/bsetopdiv/

That’s it for now. Please let me know if you have any suggestion.

Disclaimer: I am not a SEBI registered advisor. Above research is only for education purpose and not a recommendation to buy or sell. PLease consult your financial advisor before investing as investing in stock market is subject to risk.

By Aniket

Aniket is a successful internet entrepreneur having vast expertise in Digital Marketing and Equity Market. He loves to share his ideas and has no plan to stop it.

9 replies on “5 Highest Dividend Paying Stocks in India for Risk Free Return”

Ideal timeframe will be 5 Years. I have seen people holding stocks for more than 20 years and enjoying dividend returns.

Yes you can invest in these stocks. But dont allocate more than 10% of your portfolio. Invest more in equity mutual funds to get good returns.

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