These were the top dividend paying stocks in India in 2022

Stock markets

Indian Market
by 5paisa Research Team Last Updated: 2023-01-20T16:12:22+05:30

Investors looking for comfort and safety of just keeping money in their savings bank accounts have seen the pay-out dwindling over the years as the interest rate cycle went downwards. Most banks brought down the interest rates they provide on basic savings accounts to around 3-3.5% over the last one-two years. This has started moving up but still much below historical levels.

But there are other options with slightly higher risk.

Those willing to take the additional risk of investing in low-priced stocks, including penny stocks, need not only depend on trading to make money. In some cases, the dividend yields in such stocks too beat the interest rate offered by banks.

Companies which are generating profits share part of the surplus cash pumped out from the business to reward their shareholders as dividends. These bring additional gains for investors even if the share price has remained static.

Some conservative investors and indeed even mature ones pick stocks that have a generous dividend policy. This tends to keep liquidity and adds to total returns they can churn from a single investment.

One of the ways to pick stocks that reward shareholders over and above the price movement is to look at dividend yields. In simple terms, it is the pay-out being shared with stockholders as a percentage of the stock price.

Top dividend paying stocks

We scanned through the list of top dividend paying stocks in India in 2022 for high dividend yield stocks based on the current price and dividend pay-out over the last one year.

If we look at stocks with trailing dividend yields in double digit or more than 10% we get names such as Narmada Gelatines, Vedanta, The Indian Card Clothing, RSWM, India Infrastructure, Styrenix Performance, Sanofi India, IRB InvIT Fund, REC, Hindustan Zinc, Coal India and Forbes & Company.

Moving a step lower to pick stocks with dividend yield of 7-10% we have names such as Banco Products, Shrem InvIT, PowerGrid Infra, India Grid Trust, Goodyear, Power Finance Corp, Balmer Lawrie Invest, PNB Gilts, Nirlon, ONGC and Standard Industries.

Notably, investors should not look at high dividend yield stocks as a safe pick as they may still lose money if the share price goes down and they are forced to sell it for liquidity purposes. Moreover, the companies may reduce the dividend in the future and the high payout could be due to a one-time event, like an asset sale.

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