Investing in dividend stocks can be an effective strategy for those seeking a steady income stream along with potential capital appreciation. In India, several companies stand out for their consistent dividend payouts and strong financial performance.
In this article, we will highlight six prominent dividend-paying stocks that are poised for stable returns in 2024.
List of the best Indian dividend stocks in 2024
List of the best Indian dividend stocks in 2024
Coal India Limited – The world’s largest coal producer
Vedanta – A diversified natural resources company
Indian Oil Corporation – India’s largest oil company
Bharat Petroleum Corporation – A leading public sector oil company
Oil & Natural Gas Corporation – The leading oil and gas company
Power Grid Corporation of India – The backbone of India’s energy infrastructure
These are the dividend stocks to buy in India in 2024
In the sections below, we will provide a detailed overview of India’s top dividend-paying companies and their stocks, ranked by their respective dividend yield.
1. Coal India Limited – The world’s largest coal producer
Coal India Limited (CIL) is the largest government-owned coal-producing company globally. Operating under the Ministry of Coal, CIL is responsible for the production and sale of coal and coal-based products. The company’s extensive mining operations cater to the needs of various industries, including power generation, steel, and cement production.
It’s worth noting that Coal India's profit jumped 26% in the fourth quarter of 2023, growing 17% year over year. Lower costs and strong demand for coal drove the gain, even though coal prices themselves dipped.
CIL’s dominant position in the coal industry, coupled with its strong dividend yield, makes it an attractive choice for passive income-focused investors. The company’s strategic importance to India’s energy security and government support further enhance its investment appeal.
Sector: Energy
Market Cap: 2.9 trillion INR ($34.8 billion USD)
Dividend Yield: 5.14%
1-Year Performance: +108.8%
2. Vedanta – A diversified natural resources company
Vedanta Limited is a globally diversified natural resources company engaged in the exploration and production of various minerals and metals, including zinc, lead, silver, iron ore, and aluminum. Vedanta’s operations span across India, Africa, and Australia.
According to recent statements made by the company’s CEO, John Slaven, Vedanta’s aluminium-focused arm plans to increase its share of renewable energy from 5% in 2024 to 30% in 2030. The major share of renewable energy will come from solar and wind power.
The company’s strong financial performance and commitment to returning value to shareholders through regular dividends make it a top choice for dividend investors. Vedanta’s diversified portfolio and robust revenue streams provide stability and growth potential.
Sector: Natural Resources
Market Cap: 1.6 trillion INR ($19.1 billion USD)
Dividend Yield: 4.95%
1-Year Performance: +59.0%
3. Indian Oil Corporation – India’s largest oil company
Indian Oil Corporation (IOC) is the largest oil company in India, playing a pivotal role in the country’s energy sector. IOC’s operations encompass the entire petroleum production and delivery system, including refining, pipeline transportation, and the sale of petroleum products. The company also has a significant presence in the petrochemical and natural gas sectors.
The Indian Oil Corporation (IOC) operates 10 oil refineries with a total capacity of 80.6 million tonnes, nearly one-third of India's 251.2 million tonnes refining capacity. It owns over 36,200 of the country's 86,850 petrol pumps and half of the 25,400 liquid petroleum gas distributors. Additionally, IOC runs more than 130 out of roughly 280 aviation fuel stations in India.
IOC’s consistent dividend payouts and investments in expanding its refining capacity and renewable energy initiatives position it well for future growth. The company’s robust distribution network and dominant position in the fuel retail space make it a reliable investment.
Sector: Energy
Market Cap: 2.3 trillion INR ($27.6 billion USD)
Dividend Yield: 4.84%
1-Year Performance: +84.8%
4. Bharat Petroleum Corporation – A leading public sector oil company
Bharat Petroleum Corporation Limited (BPCL) is one of the leading public sector oil companies in India. BPCL’s operations include refining, marketing, and distribution of petroleum products. The company plays a crucial role in ensuring the energy needs of the country are met efficiently.
The company is currently in the process of building a new refinery facility, which will have a capacity of a whopping 12 million tonnes per year. According to the Economic Times, the investment in the state-of-the-art facility will cost about 500 billion INR ($5.99 billion USD).
BPCL’s strong dividend track record, coupled with its strategic importance to India’s energy infrastructure, makes it a favored choice among dividend investors. The company’s focus on operational efficiency and expansion into new energy sources further enhances its investment appeal.
Sector: Energy
Market Cap: 1.3 trillion INR ($15.8 billion USD)
Dividend Yield: 4.14%
1-Year Performance: +68.3%
5. Oil & Natural Gas Corporation – The leading oil and gas company
Oil & Natural Gas Corporation (ONGC) is India’s leading oil and gas exploration and production company, making it one of India’s most important infrastructure companies. It operates under the Ministry of Petroleum and Natural Gas and plays a crucial role in meeting the country’s energy needs. ONGC’s operations include exploring, drilling, and refining fossil fuel products.
ONGC is planning to kick off production from its deep-water project in the Krishna-Godavari basin located on the country’s West coast. Moreover, according to its CEO, the company aims to increase its oil production to 45,000 barrels daily “very soon.”
ONGC is known for its attractive dividend yield, providing a steady income stream for investors. The company’s international ventures and strategic partnerships further enhance its growth prospects, making it a solid pick for dividend investors.
Sector: Energy
Market Cap: 3.3 trillion INR ($38 billion USD)
Dividend Yield: 3.96%
1-Year Performance: +76.2%
6. Power Grid Corporation of India – The backbone of India’s energy infrastructure
Power Grid Corporation of India (PGCIL) is a crucial player in India’s power sector, responsible for the transmission of electricity across the country. It owns and operates a vast network of transmission lines and electricity infrastructure, ensuring reliable and efficient power delivery.
Goldman Sachs, one of the world’s largest banks, recently published a report that highlighted PGCIL as potentially the largest beneficiary of India’s growing investment in renewable energy and its energy grid. According to GS, India will spend as much as $500 billion on its renewable energy transmission by 2050.
PGCIL’s extensive transmission network and continuous investments in expanding and modernizing its infrastructure position it for long-term growth. The company’s strong dividend yield and critical role in India’s power infrastructure make it an excellent choice for dividend investors.
Sector: Utilities
Market Cap: 2.9 trillion INR ($34.8 billion USD)
Dividend Yield: 3.82%
1-Year Performance: +72.5%
The bottom line
The six companies featured in this article are not only industry leaders but also provide substantial dividend yields, making them ideal for income-focused investors. Their operations span critical sectors such as energy, natural resources, and utilities, highlighting their importance and the pivotal roles they play in India’s economic development. Investing in these companies offers exposure to the robust growth potential of India’s economy, which is expected to continue its upward trajectory in the coming years.
If you want to explore a more general overview of the best stock investments with a focus on Western companies, check out our list of the best stocks to buy right now.
For additional information about dividend investments in other countries, you can check the list of the best Australian dividend stocks or the top Canadian dividend companies.