Why Investors are Flocking to These 5 Stocks with High Dividend Yields of over 5%
Introduction:
The Indian stock market has been experiencing a correction in recent months, with many investors seeking stable income opportunities. One of the ways to generate consistent returns is by investing in dividend-paying stocks. Vedanta, Hindustan Zinc, and Coal India among five stocks that delivered dividend yields of over 5%, providing a reliable income stream for investors. In this article, we will explore why these five companies are considered attractive investment options for income seekers.
What is a Dividend Yield?
A dividend yield is a crucial metric that measures the return an investor can expect from a stock. It is calculated by dividing the total dividend paid per share by the current market price. For instance, a stock trading at ₹100 per share with a ₹7 dividend has a 7% yield.
Why Investors Love High Dividend Yields
Companies that consistently pay dividends demonstrate strong fundamentals and robust corporate governance. This indicates that the company is generating steady profits and cash from its business. Investors look for companies with high dividend yields, which provide a reliable source of income.
Vedanta, Hindustan Zinc, and Coal India among Five Stocks with High Dividend Yields
Here are five companies with dividend yields of over 5%:
Indian Oil Corporation (5.8%)
Indian Oil Corporation is one of the leading oil marketing companies in the country, focusing on oil refining and distribution. The company has consistently paid dividends and has a long history of reliable income generation. At the current market price of ₹118.6 per share, the dividend yield stands at 5.8%.
Coal India (7.12%)
Coal India is the largest government-owned coal producer in the world and operates coal washeries. The company has a long history of paying dividends and has a dividend yield of 7.12% for FY25. The company reported a muted set of numbers for Q3FY25, with total revenue declining 1.3% YoY and net profit dipping 15% YoY.
Hindustan Zinc (7.1%)
Hindustan Zinc is a leading zinc producer in India and ranks second globally in zinc production. The company has a dividend yield of 7.1% and has paid dividends of ₹29 per share to shareholders in FY25. The company traded 33.3% below its record-high level of ₹542 achieved in August 2024.
Vedanta Ltd (10.6%)
Vedanta Limited is a globally diversified natural resources company with interests in zinc-lead-silver, iron ore, steel, copper, aluminum, power, oil, and gas. The company is known for its rich and consistent dividend payouts. At the current market price of ₹408 per share, the dividend yield stands at 10.6%.
Oil & Natural Gas Corporation (ONGC) (5.6%)
ONGC is India’s largest oil and gas company, with a 71% market share in total oil production in the country. The company has paid dividends 38 times since 2011 and has a dividend yield of 5.6%. The company reported muted growth across the board for Q3FY25, with revenue remaining flat at ₹1,66,096 crore and net profit edging 1.8% higher at ₹10,148 crore.
Conclusion:
Investors seeking stable income opportunities in the Indian stock market can consider these five companies with high dividend yields. Vedanta, Hindustan Zinc, and Coal India among five stocks that delivered dividend yields of over 5% provide a reliable source of income and demonstrate strong fundamentals and corporate governance. While past performance is not indicative of future performance, these companies have a long history of paying dividends and generating steady profits.
Note:
This article is for informational purposes only and should not be considered investment advice from Upstox. It is essential to consult with a financial advisor before trading and investing.
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