Highest Dividend Yielding Stocks in India: A 10-Year Overview

India's stock market offers a variety of dividend-paying stocks that provide regular income for investors, particularly those looking for passive income streams. Many companies in sectors such as energy, FMCG, utilities, and banking have consistently paid high dividends over the years. In this section, we will look at some of the highest dividend-yielding stocks in India from the last decade, analyzing their financial health and dividend growth.

Key Metrics for Identifying Top Dividend Stocks

Before diving into the analysis of Indian stocks, it's important to understand the key metrics used to evaluate these stocks:

1. Dividend Yield: This is the annual dividend divided by the stock price. Higher yields are attractive to income-seeking investors.
2. Dividend Growth: A consistent increase in dividends over the years indicates strong financial health and profitability.
3. Payout Ratio: This measures the percentage of earnings paid out as dividends. A higher payout ratio may indicate that the company is sharing a significant portion of its earnings with shareholders.
4. Free Cash Flow (FCF): Positive free cash flow is vital for companies to maintain dividend payments without relying heavily on external debt or equity.
5. Debt-to-Equity Ratio: A lower ratio typically indicates a company is less reliant on debt, making its dividend payments more sustainable.

Top Dividend-Paying Stocks in India Over the Last 10 Years

Below is a table listing some of the highest dividend-yielding stocks in India over the past decade, along with key financial metrics.

Company Name	Dividend Yield (2023)	Dividend Growth (Last 10 Years)	Payout Ratio (2023)	Free Cash Flow (2023)	Debt-to-Equity Ratio	Sector
Indian Oil Corporation (IOC)	8.6%	5.5%	77%	₹9,500 crore	0.42	Energy
NTPC Limited (NTPC)	7.6%	6.2%	70%	₹20,000 crore	1.29	Power
Coal India (COALINDIA)	9.4%	6.0%	75%	₹15,000 crore	0.11	Mining
Hindustan Zinc (HZL)	6.5%	10.5%	58%	₹11,200 crore	0.05	Metals
Mahindra & Mahindra Financial Services (M&M)	6.2%	7.4%	40%	₹5,100 crore	0.21	Financials
Bajaj Auto (BAJAJ-AUTO)	5.7%	8.4%	50%	₹3,200 crore	0.08	Automotive
Power Finance Corporation (PFC)	8.2%	5.8%	71%	₹14,000 crore	3.10	Finance
Grasim Industries (GRASIM)	3.1%	7.0%	30%	₹9,000 crore	0.35	Cement
ITC Limited (ITC)	6.3%	7.1%	72%	₹8,500 crore	0.25	FMCG
Tata Power (TATAPOWER)	5.1%	5.0%	45%	₹4,800 crore	2.30	Power

Detailed Financial Analysis of Top Dividend Stocks in India

1. Indian Oil Corporation (IOC)

• Dividend Yield: Indian Oil Corporation offers an attractive dividend yield of 8.6%, making it one of the highest-yielding stocks in India.
• Dividend Growth: The company has a steady dividend growth rate of 5.5% over the past decade, indicating consistency.
• Payout Ratio: With a payout ratio of 77%, IOC ensures that it shares a significant portion of its profits with shareholders.
• Free Cash Flow & Debt: Indian Oil has a strong free cash flow of ₹9,500 crore. The debt-to-equity ratio of 0.42 indicates a relatively low reliance on debt, ensuring dividend sustainability.

2. NTPC Limited (NTPC)

• Dividend Yield: NTPC, one of India's leading power generation companies, has a dividend yield of 7.6%.
• Dividend Growth: With a dividend growth rate of 6.2%, NTPC demonstrates strong earnings and cash flow.
• Payout Ratio: A payout ratio of 70% indicates that NTPC shares a healthy portion of its profits with shareholders while keeping enough for reinvestment.
• Free Cash Flow & Debt: Free cash flow stands at ₹20,000 crore, providing strong support for its dividend payments. However, NTPC has a higher debt-to-equity ratio of 1.29, which may pose some risk in a high-interest rate environment.

3. Coal India (COALINDIA)

• Dividend Yield: With a yield of 9.4%, Coal India is one of the highest dividend-paying stocks in India.
• Dividend Growth: The company has increased its dividend by 6% annually over the past decade.
• Payout Ratio: Coal India has a high payout ratio of 75%, showcasing its commitment to rewarding shareholders.
• Free Cash Flow & Debt: With ₹15,000 crore in free cash flow and a low debt-to-equity ratio of 0.11, Coal India remains financially sound and able to maintain its dividend payouts.

4. Hindustan Zinc (HZL)

• Dividend Yield: Hindustan Zinc offers a strong dividend yield of 6.5%.
• Dividend Growth: The company has a robust dividend growth rate of 10.5%, making it a favorite among dividend growth investors.
• Payout Ratio: Hindustan Zinc has a payout ratio of 58%, allowing for a balance between paying dividends and reinvesting in business growth.
• Free Cash Flow & Debt: Free cash flow stands at ₹11,200 crore, and with a low debt-to-equity ratio of 0.05, the company is well-positioned to maintain its dividend payments.

5. Mahindra & Mahindra Financial Services (M&M)

• Dividend Yield: Mahindra & Mahindra Financial Services offers a dividend yield of 6.2%.
• Dividend Growth: The company has a solid dividend growth rate of 7.4%, reflecting its strong performance in the financial services sector.
• Payout Ratio: A payout ratio of 40% indicates that M&M retains a portion of its earnings for business expansion.
• Free Cash Flow & Debt: With ₹5,100 crore in free cash flow and a manageable debt-to-equity ratio of 0.21, M&M Financial Services is financially stable.

6. Bajaj Auto (BAJAJ-AUTO)

• Dividend Yield: Bajaj Auto offers a healthy dividend yield of 5.7%.
• Dividend Growth: With a 8.4% growth rate, Bajaj Auto has consistently increased dividends, showing its strong earnings potential.
• Payout Ratio: A payout ratio of 50% is optimal, ensuring the company can sustain its dividend payments while continuing its expansion efforts.
• Free Cash Flow & Debt: The company generates ₹3,200 crore in free cash flow and has a very low debt-to-equity ratio of 0.08, ensuring long-term sustainability.

7. Power Finance Corporation (PFC)

• Dividend Yield: Power Finance Corporation has a dividend yield of 8.2%, making it a strong choice for dividend investors.
• Dividend Growth: The company has demonstrated a steady dividend growth of 5.8% per year.
• Payout Ratio: The payout ratio of 71% is high but is typical for financial companies, especially those in the public sector.
• Free Cash Flow & Debt: PFC has ₹14,000 crore in free cash flow but a high debt-to-equity ratio of 3.10, indicating that the company has significant debt obligations.

8. Grasim Industries (GRASIM)

• Dividend Yield: Grasim offers a dividend yield of 3.1%, which is moderate but backed by solid dividend growth of 7%.
• Dividend Growth: Grasim has increased its dividends consistently, with a growth rate of 7% over the past decade.
• Payout Ratio: The payout ratio of 30% allows Grasim to retain enough capital for its ongoing expansion.
• Free Cash Flow & Debt: Grasim generates ₹9,000 crore in free cash flow, and its low debt-to-equity ratio of 0.35 shows it is well-managed financially.