Top dividend-paying PSU stocks: Indian Oil, Coal India, PowerGrid, PFC, ONGC for FY24

Dividend returns of state-run oil refiner and retailer Indian Oil Corporation Ltd (IOCL) for the 2023-24 financial year have beaten the fixed deposit rates of many top banks in the country.

Fixed deposits are considered the safest investment option for passive income. Dividend income is also considered an alternative for getting a steady and passive income. Investors look for stocks that declare dividend payouts regularly, called high dividend-paying shares, for passive income.

Indian Oil Corporation beat the high dividend-paying PSU stocks in 2023-24 so far. An analysis of its dividend payments and announcements for the 2023-24 financial year showed that the company provided dividend returns of 7.5%.

IOCL declared a dividend of ₹12 per share. The company’s board recommended a dividend of ₹7 per share of the face value of ₹10 each while approving the financial results for FY24 on April 30. Earlier the company paid a dividend of ₹5 per share in November 2023.

The dividend yield for total payouts in FY24 is around 7.5% against the current market price of ₹160.

The dividend yield or returns of 7.5% is higher than fixed deposit rates offered by leading banks such as State Bank of India, HDFC Bank and others.

Also Read: These mid-cap stocks declared bumper dividends in FY24

According to the State Bank of India website, the country’s largest lender offers interest rates of 3% to 7% for term deposits of varying tenures of 7-14 days to more than five years.

HDFC Bank offers interest rates of 3% to 7.25% (up to 7.65% for senior citizens) for term deposits of varying periods like 7-14 days and 5- 10 years.

Here is the list of other top dividend-paying PSU stocks for FY24:

Coal India (5.6%)

State-run coal miner Coal India Ltd has declared a total dividend of ₹25.5 per share for the 2023-24 financial year. Coal India paid interim dividends of ₹15.25 per share in November 2023 and ₹5.25 per share in February 2024 for the financial year ended in March 2024. The company announced a final dividend of ₹5 share while announcing its financial results on May 2, taking the total dividend payout for FY24 to ₹25.50 per share.

The PSU provided a dividend yield of 5.6% for FY24 against its market price of ₹456 per share.

Coal India shares have risen around 22% in 2024 so far while in the past year has given 100% returns.

Also Read: Key things to know about Aadhar Housing Finance IPO

ONGC (4%)

State-run oil and gas producer ONGC provided a dividend yield of 4% for FY24. The oil giant announced a dividend payout of ₹9.75 per share for the 2023-24 financial year.

ONGC announced an interim dividend of ₹4 per share in February 2024 and ₹ 5.75 per share in November 2023 for the financial year ended in March 2024. ONGC is yet to release financial results for the March quarter.

The dividend yield is around 4% against the current market price of ₹273.60 per share.

The stock is up 35% in 2024 so far while it has rallied around 68% in the past year.

PowerGrid Corp (3%)

India’s leading transmission utility has announced dividend payouts of ₹8.50 per share for the 2023-24 financial year. The dividend yield is around 3% against the share price of ₹295.25 per share.

Power Grid shares have risen around 63% in the past year and around 26% in 2024 so far.

Power Finance Corp (3%)

State-run power sector financier PFC has declared a total dividend payout of ₹11 per share for 2023-24. This includes two interim dividends of ₹3 and ₹3.5 per share declared in February and March 2024 and another payout of ₹ 4.50 per share in November 2023.

The dividend yield is around 3% against its current market price of ₹421.55 per share.

PFC shares have given year-to-date returns of 12 % in 2024 while in the past year, the stock rallied more than 223%.

ONGC, Power Grid and PFC are yet to release their full financial year results. Investors are expecting announcements of final dividends along with the results. When declared, the dividend income will boost the returns further.