While curating a long-term portfolio, investors should also account for high dividend-paying companies which helps them not just on the capital appreciation part but also with a consistent income stream in the form of dividends.
I personally invest in high dividend-paying companies and if you are also inclined toward an easy way to create a passive source of income, here’s a list of 3 large caps that are currently trading at a massive yield. These stocks have been narrowed down from the largest 100 companies on the NSE to maintain the quality of the portfolio.
Vedanta Limited
Vedanta Ltd (NS:) is the best dividend stock currently available in the large-cap space. It is a natural resources company with a market capitalization of INR 94,361 crore and trades at an inexpensive TTM P/E ratio of 10.73. Because of its exceptionally high dividend, the stock didn’t appreciate in value in the past 12 months, delivering a negative return of 3.7%.
However, its dividend yield of 40% is what keeps investors glued to this counter. One of the reasons for such a high payout is its parent company which services a part of its debt obligations via dividends and obviously, this is not sustainable but looking at the consistent history of dividends, it’s a no-brainer for any dividend portfolio.
Hindustan Zinc Limited
Hindustan Zinc Ltd. (NS:) is engaged in the mining and smelting of metals such as silver, , etc., having a market capitalization of INR 1,34,407 crore and trades at a TTM P/E ratio of 14.32. This is also a high dividend-paying company and because Vedanta has a stake in it, the latter also gets benefitted from the former’s dividend payout.
The stock trades at a dividend yield of 23.7%, partly thanks to a very high payout of INR 75.5 per share in FY23, up from INR 18 per share in the preceding financial year. The stock has strong support around INR 292 – INR 293, which is where it can become a good option for adding it to the portfolio.
Coal India Limited
Coal India Ltd (NS:) is a government-owned coal mining giant with a market capitalization of INR 1,41,773 crore and trades at a TTM P/E ratio of only 5.03, making it the cheapest profitable company (as per FY23 earnings). The company has been increasing its net income at a high annualized rate of 31.9%, over the past 5 years.
FY23 record high revenue and net income helped it to shell out INR 24.25 per share in dividends which is the 3rd consecutive year of DPS (dividend per share) jump and the stock is trading at a double-digit yield of 10.5%, the highest among all Nifty 50 stocks. The support of INR 207 – 210 is a very good area to add it to the portfolio.
These are the only stocks in the large-cap space that are trading at a dividend yield of over 10%.
