When it comes to investing in stocks, most investors are focused on capital gains, that is making money when the stock price rises. But apart from this, for many investors, dividends are like the cherry on top of a cake meaning a little extra that adds sweetness to their overall returns. And when this makes up a significant portion of the investment, this is where dividend yields come into the picture. In simple terms, dividend yield measures the return on investment from dividends relative to the stock price.
For instance, if a company offers a dividend yield of 9 per cent, and if a person invested Rs 1,000 in its stock, potentially that person could earn Rs 90 as dividends in a year.
These stocks reward shareholders with payouts. Companies with high dividend yields often have consistent cash flows
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Let’s take a look at top companies with high dividend yield, as per the data provided by Axis Securities:
PSU Stocks
Public Sector Undertaking (PSU) stocks are one of the most popular among investors. Leading the list in terms of dividend yield is Chennai Petroleum Corporation, which offers a 9 per cent yield, with a current market price (CMP) of Rs 592.
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Close behind is Hindustan Petroleum Corporation which offers a 6 per cent dividend yield at a CMP of Rs 401. In a similar note, Coal India also provides a 6 per cent yield, trading at Rs 410.
Oil & Natural Gas Corporation and Indian Oil Corporation round out the group with yields of 5 per cent, with CMPs of Rs 252 and Rs 142, respectively.
Large-Cap Stocks
For large-cap companies, Vedanta stands out with a 9 per cent dividend yield,
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