Are you someone who has just started your trading journey and looking for the top dividend paying PSU stock in India 2022? Dividends are a great way to earn passive income and most traders and investors are always looking for top dividend paying psu stocks in India.
For research and analysis, they primarily use historical data from India’s top dividend paying stocks over the last ten and five years. Some are undecided about whether to invest in the highest dividend paying penny stocks, high dividend paying PSU stocks, or high dividend paying PSU stocks (blue-chip).
Today, in our blog, we’ll discuss the top dividend-paying PSU stocks in India 2022. We hope that this blog will help you make an informed decision about your investment.
What is Dividend?
When it comes to stock investing, companies reward their investors in two ways: dividends and stock buybacks. Many businesses use both to keep their shareholders happy.
In its most basic form, the dividend is a specific amount per share paid to shareholders from the distributable surplus.
The dividend amount is distributed to all eligible shareholders in proportion to the number of shares held and the amount of dividend declared by the company.
A company that declares dividends are considered to be cash-rich, and it also sends the message that the company is profitable.
A high dividend-paying company is generally preferred by shareholders because it provides them with a consistent source of income.
Aside from other metrics such as the Price to Earnings (P/E) ratio and Price to Book (P/B) value, investors and analysts consider a company’s dividend yield to be an important metric for determining its worth.
Dividend Paying PSU Stocks Explained
Dividend-paying stocks are stocks that pay out dividends on a regular basis. Dividend stocks are typically well-established companies that have a history of giving back profits to shareholders.
These dividends or rewards can be in the form of cash, cash equivalents, stock, or other assets, and are typically paid from the remaining profit after all necessary expenses have been met.
What are Public Sector Undertakings, and How Do They Work?
Now that we’ve defined a dividend, let’s take a quick look at what public sector undertakings are and how they work.
PSU companies in India now have a total market capitalization of more than Rs 10 lakh crore. And these PSUs pay a significant amount of money to the government on a regular basis in the form of dividends, excise duty, customs duty, and corporate taxes.
PSUs, or public sector undertakings, are closely linked to the economy’s core sectors and have helped India as a country to develop a strong industrial base. The Indian government owns the majority of these businesses. The economy’s core sectors such as finance, coal, capital goods, infrastructure, oil, power, metals, and mining play a critical role in nation-building, setting the tone for the economy in the right direction.
Nirmala Sitharaman, the Union Finance Minister, has announced major reforms for Public Sector Undertakings (PSUs) very recently, which will likely result in large-scale consolidation and divestment of State-run firms in many sectors. The government also is expected to announce a new public-sector privatization policy that will focus on privatizing non-strategic PSUs based on feasibility. This is a positive step because it will allow more private competition into certain markets while also consolidating the sprawling network of numerous PSUs. These bold announcements, on the other hand, will only unlock a lot of value if they are quickly translated into action.
PSUs: Safe Bet for Market Participants
Stock investing can appear to be a huge capital drain, but because PSU stocks pay generous dividends, they are generally a safe bet for market participants.
PSU stocks are among the highest dividend-paying companies, with IOC, Coal India, and GAIL topping the dividend charts with dividend yields of 15.52 percent, 11.35 percent, and 6.91 percent, respectively, as of December 2021. PSU stock dividend yields are higher than most banks’ current FD rates.
And with the possibility of capital appreciation, who would want to pass up such an opportunity?
Top Dividend Paying PSU Stocks in India
Let’s take a look at the top public sector undertakings (PSUs) that pay good dividends.
Coal India
Since February 18, 2011, Coal India Ltd. has declared 20 dividends, with an equity dividend of Rs 17.50 per share declared in the last 12 months.
Due to India’s abundant coal reserves and the lack of other sustainable fuel sources, coal will continue to play a dominant role in meeting the country’s energy needs. Coal India holds 48 percent of India’s proven reserves and produces the majority of the country’s coal. Apart from cement, fertilizers, and brick kilns, the power and steel industries are major consumers of coal. A ‘Maharatna’ company is Coal India.
Indian Oil Corporation Limited
Since August 27, 2001, the https://iocl.com/Indian Oil Corporation has declared 35 dividends. In the last 12 months, it has declared an equity dividend of 10.50 per share.
Indian Oil Corporation Ltd., founded in 1959, is a Large Cap company in the Gas & Petroleum sector with a market capitalization of Rs 120,407.09 crore. Petroleum Refinery Products, Other Operating Revenue, Other Services, Sale of Services, Scrap, and Subsidy are the key products/revenue segments for Indian Oil Corporation Ltd. for the year ending 31-Mar-2021.
The company reported a Consolidated Total Income of Rs 166,482.22 crore for the quarter ended December 31, 2021, down 3.57 percent from the previous quarter’s Total Income of Rs 172,646.31 crore but up 61.75 percent from the same quarter last year’s Total Income of Rs 102,928.47 crore.
In the most recent quarter, the company reported a net profit after tax of Rs 5,931.06 crore.
PTC India Ltd.
PTC India, formally known as Power Trading Corporation Of India Ltd., is primarily involved in power trading. It was founded by the Indian government as a public-private partnership with the goal of creating a commercially viable power market in the country. The company has a market capitalization of Rs.1,868 crores, and the stock of PTC India Ltd is currently trading at Rs.63.
In 2019, the company paid a final dividend of Rs.4 per share, which is 40% of the face value, and a total dividend of Rs.7.5 per share in 2020. The dividend yield on the stock is 8.72 percent.
Power Finance Corporation Limited
Since September 7, 2007, Power Finance Corporation Limited has declared 29 dividends. In the last 12 months, it has declared an equity dividend of Rs 12.75 per share.
Power Finance Corporation Ltd., founded in 1986, is a Large Cap company in the Term Lending Institutions sector with a market cap of Rs 31,205.76 crore. For the fiscal year ending 31-Mar-2021, Power Finance Corporation Ltd.’s key products/revenue segments include Interest, Dividend, Fees & Commission Income.
The company reported a Consolidated Total Income of Rs 19,215.00 Crore for the quarter ended December 31, 2021, down.35 percent from the previous quarter’s Total Income of Rs 19,282.60 Crore but up 4.19 percent from the same quarter last year’s Total Income of Rs 18,441.72 Crore. In the most recent quarter, the company reported a net profit after tax of Rs 4,893.91 crore.
REC Limited
Since September 8, 2008, REC Limited has declared 29 dividends. In the last 12 months, it has declared a dividend of $12.21.
REC Ltd., founded in 1969, is a Large Cap company in the Term Lending Institutions sector with a market capitalization of Rs 25,772.68 crore. Interest, Income From Sale Of Shares & Securities, Fees & Commission Income, and Dividend is the key products/revenue segments for the year ending 31-Mar-2021 at REC Ltd.
The company reported a Consolidated Total Income of Rs 10,070.42 Crore for the quarter ended December 31, 2021, up.14 percent from the previous quarter’s Total Income of Rs 10,056.53 Crore and up 10.79 percent from the same quarter last year’s Total Income of Rs 9,089.46 Crore. In the most recent quarter, the company reported a net profit after tax of Rs 2,773.44 crore.
NMDC Limited
Since August 28, 2002, NMDC Limited has declared 41 dividends. In the last 12 months, it has declared an equity dividend of Rs 14.74 per share.
NMDC Ltd., founded in 1958, is a Large Cap company in the Mining sector with a market capitalization of Rs 49,116.95 crore. For the year ending 31-Mar-2021, NMDC Ltd.’s key Products/Revenue Segments include Iron Ore, Pellet, Sale of Services, Diamonds, Power, and Other Operating Revenue.
The company reported a Consolidated Total Income of Rs 6,026.68 crore for the quarter ended December 31, 2021, down 12.43 percent from the previous quarter’s Total Income of Rs 6,882.44 crore but up 35.10 percent from the same quarter last year’s Total Income of Rs 4,460.97 crore. In the most recent quarter, the company reported a net profit after tax of Rs 2,048.40 crore.
NLC India Ltd
NLC India is in the lignite mining and power generation business, employing both lignite and renewable energy sources. The company is valued at Rs.7,814 crore on the stock exchange.
The stock is currently trading at Rs. 67.90, with an excellent dividend yield of 12.5 percent. In 2019, the company paid a dividend of Rs.4.53, or 45.3 percent of its face value, to its shareholders, and in 2020, it paid an interim dividend of Rs.7 to its existing shareholders.
Conclusion
So, here in this blog, we discussed our list of top dividend paying PSU stocks in India 2022. Please keep in mind that before investing, you will need to conduct qualitative and quantitative research on the sector and the companies. Things change, so it’s critical to make decisions based on current information.
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