Vedanta, Coal India and Hindustan Zinc, among five stocks with dividend yields above 5%

Dividends are a popular income source for long-term investors, with companies like Vedanta, Hindustan Zinc, and Coal India known for their regular and substantial payouts. Amid recent market corrections, investors are increasingly turning to dividend-paying stocks as a reliable income stream.

Key Stocks with Strong Dividend Yields

In a market where the benchmark indices have fallen over 14% from their peak, and small and mid-cap stocks have been hit even harder, dividend-paying companies are seen as a haven. These firms tend to have strong fundamentals, consistent profitability, and a proven track record of rewarding shareholders.

Here are five stocks with dividend yields above 5%:

Oil & Natural Gas Corporation (ONGC)

ONGC, India’s largest oil and gas producer, continues to offer a solid dividend yield of 5.6%, with ₹13.5 per share paid in FY25. Despite a 33% drop from its August 2024 peak of ₹344, ONGC remains a prominent dividend stock, thanks to its 38 dividend payouts since 2011.

Coal India

As the world’s largest government-owned coal producer, Coal India maintains a strong dividend yield of 7.12%. It paid ₹26 per share in FY25, despite a dip in Q3FY25 earnings. Coal India shares, which have fallen 0.77% to ₹361.15 recently, have a rich history of dividend payments, having distributed 29 times since 2011.

Hindustan Zinc

A major zinc producer, Hindustan Zinc boasts a dividend yield of 7.1%. The company paid ₹29 per share in dividends for FY25, with its stock down 33.3% from its record high of ₹542 in August 2024. Hindustan Zinc's dividend history is equally impressive, making it a favorite among income-focused investors.

Vedanta Ltd

Vedanta offers the highest yield among the five, standing at an impressive 10.6%. The company paid ₹43.5 per share in FY25 dividends, with its stock having surged 73% in 2024 before correcting 20%. Despite recent price fluctuations, Vedanta remains a top choice for dividend-seeking investors.

Indian Oil Corporation (IOC)

IOC, a key player in India’s oil refining and distribution sector, offers a dividend yield of 5.8%. With ₹7 per share paid in FY25, the company’s financial performance has been mixed, with a 77% drop in profit due to one-time expenses. However, its strong dividend history and recovery potential make it a stable income source.

Other Dividend-Paying Stocks

In addition to the five stocks mentioned, several other companies, including Shriram Finance, BPCL, REC, Oil India, NMDC, National Aluminum, Indraprastha Gas, and Aster DM Healthcare, also offer attractive dividend yields above 5%.

Disclaimer: This article is intended for informational purposes only and should not be considered as investment advice. Past performance is not indicative of future results. Please consult with a financial advisor before making any investment decisions.