In India, the dividend yield of the Nifty 50 is a modest 1–2%. But finding companies that give you high payouts while supporting robust balance sheets is a rare prospect.
Some of these high dividends are from sectors like mining, metals, energy, and power.
These sectors often generate large, expected cash flows and have steady demand, irrespective of short-term market turmoil.
But not every high-payout stock is worth possessing. Some companies offer unsustainably high payouts that disguise deeper financial difficulties.
The real jewels are those that offer high dividends but still have low valuations, clean governance, and reliable earnings power.
Our Stock Selection Criteria
We used Equitymaster’s high dividend yield screener and applied these filters…
The dividend yield must be greater than 5%, with a PE ratio below 20, a marketcap greater than Rs 50 billion (bn), a positive profit track record in the last 3 years, and zero promoter pledge (June 2025 quarter).
We’ve identified four high dividend yield stocks that fit our selection criteria.
#1 Vedanta
Vedanta is a diversified natural resources company with operations in aluminium, zinc, lead, iron ore, silver, oil & gas, copper, steel, and power.
Its business grows over time as its product consumption is cyclic. Moreover, its shared procedures bring cost benefits.
Vedanta’s revenues improved, reaching Rs 1,529.7 bn from Rs 1,437.3 bn in FY25. Its net profits in FY25 were Rs 205.3 bn.
This was because of high zinc and aluminium prices. The average return on equity (RoE) has been 37.2% over the past three years.
Controlled aluminium smelting costs, growth in oil & gas volumes, planned hedging against price instability and protected returns despite commodity movements, also aided Vedanta’s performance.
The dividend payout of 82.8% in FY25 shows cash flows and the management’s focus on shareholder returns.
Vedanta is intentionally turning towards energy transition metals. Zinc, copper, and aluminium will be central to EVs, solar panels, and wind turbines.
The company has received incentives for semiconductor and display glass manufacturing under India’s Atmanirbhar push.
Going forward, Vedanta is looking to increase its renewable energy capacity to 5 GW by 2030. The generated energy will be used for internal consumption, while reducing carbon emissions and energy costs.
#2 Coal India
Coal India is the world’s largest coal producer, providing for about 80% of India’s domestic coal demand. It plays a vital role in fuelling India’s thermal plants. It has also diversified into coal gasification and renewables.
Coal India generated 781 million tonnes (MT) of coal in FY25 up from 774 MT in FY24. This improvement was driven by quicker railway freight, separate coal passages that improved dispatch efficiency, and coal auctions by the government.
The demand from thermal power plants, as electricity consumption rises, controlled costs of operation, and declining per-tonne costs also helped Coal India’s growth.
The company’s revenue fell marginally to Rs 791.9 billion (bn) from Rs 807.6 bn in FY25. The net profit also fell to 353.7 bn.
The average return on equity was 44.3% over the last three years.
While coal is still the mainstay of India’s energy combo, Coal India is expanding into coal gasification, mechanised surface coal mining, and renewables.
Looking ahead, Coal India aims to set up 3 GW solar projects. It will also upgrade its mechanised coal transport and loading system under its first-mile connectivity projects.
#3 Oil & Natural Gas Corporation (ONGC)
ONGC is the largest oil & natural gas company in India.
70% of India’s crude and 84% of its natural gas is produced by ONGC.
FY25 saw volatility in crude prices. However, ONGC’s revenue improved to Rs 5,608.7 bn from Rs 5,500 bn in FY24. The company’s net profit was Rs 383.3 bn in FY25.
The RoE has averaged 13.2% over the past three years.
The company’s offshore projects and improved recovery techniques enhanced production efficacy. The revenues were supported by steady crude prices in the $ 75–85 per barrel range for most of the year.
Better cost control in offshore logistics and drilling, and higher refining margins through HPCL during peak demand periods, also helped the company.
Going ahead, ONGC will invest Rs 1 tn in the next three years for deepwater exploration, EOR projects, and offshore wind development.
It is looking to associate with businesses for liquified natural gas (LNG) trading and increasing its petrochemical footprint. Doing so will allow it to stabilise its earnings due to unpredictable upstream operations.
#4 PTC India
PTC India is a leading power trading solutions provider, enabling long-and short-term power transactions between the generator and distribution companies.
It has holdings in renewable energy and financial services, too. It is the co-promoter of India’s latest power exchange, Hindustan Power Exchange (HPX), and has cross-border trade with Nepal, Bhutan, and Bangladesh.
The company recorded revenues of Rs 162.4 bn and net profit of Rs 85.4 bn in FY25. Dividend was Rs 11.7 per share in FY25, representing a payout ratio of 40.6%.
The trading volumes increased as the participation in the day-ahead and real-time markets surged. Among other factors driving this growth were rising bilateral trade for renewable energy, particularly solar.
The growth in profit margins came from value-added transactions and cross-border trade with Nepal and Bhutan, and controlled overheads.
Looking forward, PTC India will introduce designed products for wind-solar hybrid trading and explore opportunities for cross-border electricity trade with Southeast Asia and Bangladesh.
The company will invest money in digital trading platforms that will enable load estimation and price discovery for better efficiency and success.
Conclusion
Dividend-paying stocks can be a great way to earn a steady income while enjoying potential long-term growth. Companies that consistently pay dividends often have strong financials and a history of rewarding shareholders, making them a reliable choice for investors who love passive income. Plus, reinvesting those dividends can supercharge returns over time.
But don’t get blinded by high yields—sometimes, they signal trouble rather than opportunity. And let’s not forget growth stocks, which may not pay dividends but can deliver impressive gains by reinvesting in expansion.
The sweet spot? A well-balanced portfolio that blends dividend earners with high-growth potential, ensuring both stability and upside.
Investors should also pay attention to factors like corporate governance, payout consistency, and growth potential before making their decisions.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here…
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