PSU (Public Sector Undertaking) stocks are shares of government-owned companies operating in key sectors like banking, oil & gas, power, infrastructure, and defense, contributing significantly to economic development.
A high dividend yield indicates a stock offering substantial dividend payouts relative to its price.
PSU stocks are known for their stability, strong government backing, and attractive dividend payouts. High dividend yield PSU stocks are particularly appealing to investors seeking steady income along with potential capital appreciation.
Hence, let’s examine the top 5 such stocks selected from Equitymaster’s screener for High Dividend Yield PSU Stocks.
These are not stock recommendations. Investors should do their own research and do due diligence before considering any investment in the stock market.
Also, investors should pay close attention to corporate governance while performing their due diligence.
#1 Indian Oil Corporation Ltd (IOCL)
First on this list is IOCL.
IOCL is a Maharatna company controlled by Government of India.
It has business interests straddling the entire hydrocarbon value chain – from refining, pipeline transportation and marketing of petroleum products to research and development, exploration & production, marketing of natural gas and petrochemicals.
It has the leadership position in the oil refining & petroleum marketing sector of India.
As of 10 March 2025, the company has a dividend yield of 9.9%.
The company’s revenue has grown at a compounded average growth rate (CAGR) of 7.9% in the last five years while its net profit has grown at a CAGR of 18.6%.
The company’s five-year average return on equity (RoE) and return on capital employed (RoCE) were 14.9% and 12.3%, respectively.
Its debt-to-equity ratio was 0.7 as of 31 March 2024.
The company recorded refining throughput of 18.1 MMT in Q3 FY25 with a capacity utilization of 102.3%.
Additionally, IOCL recorded the highest-ever sale of petroleum products in Q3 FY25 at 23.4 MMT, compared to 20.5 MMT in the previous quarter.
The management is optimistic about growth trajectory with anticipated increase in petroleum product demand, projected to reach 252.9 MMT in FY26.
The company has made an investment of Rs 720 billion (bn) to enhance refining capacity by 25% to 88 million metric tonne per annum (MMTPA).
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