A recent Axis Securities report lists 15 public sector undertakings (PSUs) that have yielded dividends between 3% and 9% for investors over the past year. These companies operate in energy, mining, financial services, and metals sectors. Even at current market prices, some of these stocks could offer stable returns for long-term investors.
PSU Dividend Stocks Attracting Investors
Public Sector Units (PSUs) have not only shown b share price performance but have also provided investors with consistent and attractive returns in the form of dividends. Axis Securities' recent report identifies 15 such PSU stocks that yielded between 3% and 9% dividend to investors over the past 12 months.
Most of these companies belong to the oil and gas, mining, power, and banking sectors. These stocks can be appealing to investors seeking regular cash flow.
Top Dividend Yielding Companies
1. Chennai Petroleum Corporation Limited (Chennai Petroleum) – Yield: 9%
This government-owned oil refining company's share currently trades at ₹629. The company paid a dividend of ₹55 per share last year, resulting in a 9% dividend yield. This means an investor who invested ₹1000 a year ago would have received ₹90 in cash. This is the highest dividend-yielding company on this list.
2. Bank of Baroda – Yield: 7%
Bank of Baroda, a leading public sector bank, has shares available at ₹237. Last year, the company paid a dividend of ₹16, resulting in a 7% yield. It is considered a b option for stable income in the banking sector.
3. Coal India Limited – Yield: 7%
Coal India is India's largest coal mining company. Its share price is ₹391, and a dividend of ₹26.4 was paid last year. With a 7% dividend yield, this company has consistently provided investors with good annual cash returns.
4. NMDC Limited – Yield: 6%
This mining PSU trades at ₹69. The company paid a dividend of ₹3.8, resulting in a 6% yield. NMDC could be a good option for those seeking good income from a lower-priced share.
5. ONGC – Yield: 5%
ONGC, India's largest government-owned oil and gas company, has shares priced at ₹250. A dividend of ₹13.5 was paid last year, resulting in a 5% yield. This company consistently earns b profits and distributes dividends to investors.
6. National Aluminium Company Limited (NALCO) – Yield: 5%
NALCO, a government-owned aluminum producer, has shares priced at ₹186. The company paid a dividend of ₹10, resulting in a 5% dividend yield. It is considered a stable and reliable company in the metals sector.
7. REC Limited – Yield: 5%
This company, which finances power projects, trades at ₹392. The company paid a dividend of ₹20.4, resulting in a 5% yield. Its stability is attributed to its position as a financial company in the power sector.
8. Indian Oil Corporation Limited (IOCL) – Yield: 5%
IOCL, one of India's largest oil marketing companies, has shares priced at ₹141. The company paid a dividend of ₹7. This company is consistently active in dividend distribution.
9. Bharat Petroleum Corporation Limited (BPCL) – Yield: 5%
BPCL trades at ₹316 and paid a dividend of ₹15.5 last year. This petroleum sector company also has a 5% dividend yield, making it attractive for long-term investment.
10. Power Finance Corporation (PFC) – Yield: 5%
PFC's share is at ₹397, and a dividend of ₹18.3 was paid. This company provides loans to the power sector and returns good profits to investors.
Companies with 3%-4% Dividend Yield
11. Balmer Lawrie & Company Limited – Yield: 4%
This company, with a share price of ₹206, operates in logistics, travel, and chemicals sectors. A dividend of ₹8.5 results in a 4% yield. This mid-cap company offers a stable option for investors.
12. RITES Limited – Yield: 4%
This infrastructure consultancy company's shares are available at ₹281. With an ₹11.2 dividend, its yield is 4%. The company plays a significant role in railway projects.
13. Canara Bank – Yield: 4%
This public sector banking share, priced at ₹108, pays a dividend of ₹4. The yield is 4%, and it's another option for stable dividends in the banking sector.
14. Power Grid Corporation of India (PGCIL) – Yield: 4%
PGCIL is India's leading power transmission company. Trading at ₹287, this share pays a dividend of ₹10.5, resulting in a 4% yield.
15. GAIL (India) Limited – Yield: 3%
This government-owned gas sector company trades at ₹186 and pays a dividend of ₹6.5, resulting in a 3% yield. This company is a leader in gas transportation and marketing.
Why is Dividend Yield Important?
For investors seeking annual cash income from the stock market, dividend yield is a crucial metric. It shows the proportion of profits a company returns to investors.
These government companies not only earned profits but also timely distributed a share of them to investors. This makes these shares considered reliable for the long term.
