9 Best Dividend Paying Stocks for Long Term in India! [2022]

Now, let’s know about what Best Dividend Paying stocks does?

Heidelberg Cement

Heidelberg Cement is one of the largest building materials companies and operates in five continents. Products of the company are used for the construction of houses, infrastructure, and commercial and industrial facilities, thus meeting the demands of a growing world population for housing, mobility, and economic development.

Core Business activities include the production and distribution of cement, aggregates, ready-mixed concrete, and asphalt. Furthermore, Heidelberg Cement offers services such as worldwide trading in cement and coal by sea.

Business of the Company is primarily linked to construction activities. Any uptick in construction activities can directly benefit it. Considering its financials, dividend yield of 3%+ also looks sustainable.

ITC

ITC is a diversified company having presence in FMCG, Hotels, Packaging, Paperboards & Specialty Papers and Agri-Business. Some of the renowned brands of company from Non-Cigarette businesses include names like Aashirvaad, Sunfeast, Yippee!, Bingo!, Fabelle, Vivel, Savlon, Classmate, Mangaldeep etc. In Cigarette Business, ITC holds the leadership position in country. ITC’s wide range of cigarette brands, includes Insignia, India Kings, Classic, Gold Flake, American Club, Navy Cut, Players, Scissors, Capstan, Berkeley, Bristol, Flake, Silk Cut, Duke & Royal.

In FY20, Cigarette Business of the company contributed almost 41% to Total Revenue. Non-cigarette businesses like Personal Care, Food, contributed almost 22 percent in Total Revenue of the company. Other Businesses of company are comparatively smaller in size.

In our list, ITC is the only company which is a High Dividend Paying stock but has not been able to perform consistently over last few years. I added ITC in the list because risk in the stock looks quite low from here and chances of witnessing any growth in the share price are higher. Considering its dividend yield of over 5%, stock seems a good bet for dividend income.

Petronet LNG

Petronet LNG Limited (PLL) formed on April 2, 1998 as a Joint Venture Company (JVC) between GAIL, ONGC, Indian Oil and BPCL. All these PSUs hold 12.5% each in the company. Remaining stake is hold by Public and Institutional Investors.

Currently, Petronet LNG operates two LNG regasification terminals in India. One is at Dahej, Gujarat with present nominal capacity of 17.5 MMTPA. Another is set up in Kochi, Kerala having a nominal capacity of 5 MMTPA. The company is also exploring suitable opportunities within and outside India to expand its business presence.

Considering who are the owners of Petronet LNG, risk doesn’t seems quite high in the stock. Financials of the company have enough room to help company maintain the current Dividend yield of over 4% in future. Stock price has seen over 22 percent growth annually since 2013 which also makes it an attractive pick for Dividend Income.

Torrent Power

Torrent Power is one of the leading brands in the Indian power sector, promoted by the Rs. 21500 Crore Torrent Group. It has a portfolio of coal based, gas based and renewable power plants with an aggregate generation capacity of 3879 MW.

The Company distributes power to over 3.65 million customers annually in its distribution areas of Ahmedabad, Gandhinagar, Surat and Dahej SEZ and Dholera SIR (Gujarat), in Bhiwandi, Shil, Mumbra and Kalwa (Maharashtra) and in Agra (Uttar Pradesh).

Financial strength of the company looks quite strong. Going forward, business opportunities for Power company are expected to only expand. Therefore, it could be a good bet for dividend income in the long term.

VST Industries

Headquartered in Hyderabad, VST Industries incorporated in 1930 with the Initial name of Vazir Sultan Tobacco Company. Later, company changed this name to VST Industries.

Company manufactures and sells cigarettes and Tobacco related products. Company is the second largest cigarette manufacturer in India. Total, Charms, Charminar, Editions, Gold, and Moments are some of the popular brands of the company.

Because VST operates a tobacco business, it is possible that stock may not be able to rise every month or quarter. But as per what is visible in the share price history, stock has been able to see a good consistent rise whenever the valuations of company had become low and attractive. Financials of the company also seems strong. Dividend yield of around 3 percent and a regular share price appreciation in stock makes it a good bet.

Swaraj Engines

Swaraj Engines Ltd is an India based company engaged in the principal business of manufacturing and selling diesel engines for tractors. Company operates in the segments of manufacturing Diesel engines, Diesel engine components, and Spare parts. Its major part of revenue comes from the sale of Engines. Swaraj Engines sells 5 types of Engines from 20HP range to 50HP range.

Established in 1989, Swaraj Engines was promoted by Punjab Tractors Ltd. and Kirloskar Group. After that, Mahindra & Mahindra has acquired the Punjab Tractors company. Therefore today, M&M and Kirloskar Group are the promoters of Swaraj Engines.

Any improvement in Tractor Industry, hike in MSP and other related factors to Agriculture can directly benefit the company.

Britannia Industries

Britannia Industries Ltd is an Indian packaged-food producer company. Its main product categories are: biscuits, breads, dairy, cakes, and rusks. The biscuits product line offers sweet biscuits under the GoodDay brand, crackers under the 5050 brand, nutritional and digestive biscuits under the NutriChoice brand, and other products. The bread products segment offers whole-wheat breads, white sandwich breads, and bread assortments. The dairy product line sells cheese, milk, and yogurt under the Britannia brand. The cake segment offers bar cakes, muffins and many more.

Established nearly 100 years ago, Britannia is a part of Wadia Group. In Food Industry, Britannia is one of India’s most trusted brands. Going forward, company is likely to perform well on the back of expanding Food Industry in India.

Polyplex Corporation

Polyplex Corp Ltd is engaged in the manufacturing of plastic films and has world’s fifth-largest capacity to produce polyester films. Company has diversified its businesses under Polyethylene Terephthalate films, Cast Polypropylene films, and Biaxially Oriented Polypropylene. These products act as raw material for their product applications like packaging, industrial, and specialties, electrical, roofing, and others.

As much as 73% of Polyplex’s products are used in packaging food products such as food pouches, rice bags, wafer bags, easy peeling cups of milk-based products and ready-to-serve noodles. These films are also used for packaging healthcare products such as sanitizers, liquid disinfectants and cleaning liquids.

Company has been maintaining a good dividend yield from a long term. Thin PET film business which accounts for nearly 60% of Polyplex’s revenues, is expected to see a good expansion going forward.

So, that was some brief information about the Dividend Paying companies that have been mentioned in the list. Now, let’s look at some questions that might come to your mind regarding Dividend Paying Stocks.

What are High Dividend Yield stocks?

High Dividend Yield stocks can be considered as those shares which are giving higher dividends than the normal dividend yields.

(The dividend yield, expressed as a percentage, shows how much a company pays out in dividends each year relative to its stock price. It is equal to the annual dividend paid per share divided by the stock price)

If a company’s share price is Rs 200 and pays Rs 4 per share dividend annually, then dividend yield of the company will be 2 percent.

Any Dividend Yield above 3-4% can be considered High Dividend Yield as their Dividend Payments are going to be significant for you. Therefore, only these kind of stocks have been mentioned in the list of High Dividend Yield Stocks.

Is a Good dividend yield enough to make Money in Stock Market?

Dividend alone might not help you to generate good returns in Stock Market. Appreciation or growth in share price is also important to earn overall better returns.

If a company is paying 5% dividend yield annually, but the share price is declining 10% annually, then there will be no use of dividend. When you will sell the shares of company from your account, you will effectively be in a loss of 5% (5% dividend – 10% loss on shares).

So, a Good Dividend Yield + Growth in Share Price is important to generate good returns. Therefore, only these kind of stocks have been added in the List of Best Dividend Paying Stocks.

Are Dividend Paying Stocks good to Buy?

Without making any transaction (buy or sell), you receive some money which is directly credited in your bank account. That is a benefit of holding Dividend Paying Stocks. Over long term, it can become very fruitful for you if your stock keep performing for long time and you kept receiving some regular dividends from it.

That’s why, Investors always keep an eye on Good Dividend Growth opportunities in stocks. These kind of stocks generally pays good dividend, keep increasing that dividend amount over long term, and therefore their share price also keeps rising.

Is there any Risk in Buying Dividend Paying Shares?

There is no seperate Risk arising out of investments made in Dividend Paying Shares. However, if a company pays too much dividend, then it can be a sign of lack of good growth opportunities for it. That’s why, they are distributing most of their profits among shareholders and not investing that money back into the business.

If that is the case and there is no Growth in the Business, then its shares might not be able to see any rise or growth. Company wouldn’t be among the Dividend Growth stocks and just remain a High Dividend Yield stock.

So, that is the end of this article.

These were the Top Dividend Paying Stocks that may help you to earn money from Indian Stock Market through dividend income + appreciation in share price too.

If you know any other share which can be a Good Dividend Growth bet, has been a consistent performance, dividend yield is significant which is not mentioned here, you can share it through Comment section or Contact form.

If I find it suitable, I will definitely add it here so that investors can discover more good dividend paying stocks.

Good luck : )