“I do not own a single security anywhere that doesn't pay a dividend, and I formed a mutual-fund company with that very simple philosophy”. said Kevin O’ Leary, a Canadian businessman and investor. If this approach to investing resonates with you, you might want to check out this list of companies that pay the highest dividends consistently.

First up: What Are Dividends?

A dividend is a share of the profit paid to its shareholders for their investment in a company’s equity.
A company's earnings can be used in a variety of ways whenever it produces a profit. 

1. Invest the profit: In expanding its business, buying inventory, entering a new market and so on.
2. Distribute the profit to its proprietors
3. Reward its investors with a percentage of the profit earned

Most large companies pay out dividends once every year. Sometimes, this is done twice.

A list of Indian stocks that give out the highest dividends

Here's a list of stocks that have had the highest dividends over a 10-year period

Additional Top Dividend Stocks in India

What’s so good about dividends?

If you’ve been a long-term investor and have invested in a certain company for, lets say, 10 years, and the company does not give any dividends. Then, one way to make gains from this investment is to sell your shares at a much higher price. On the other hand, if the company does give dividends, then your capital is growing even if you haven’t sold the stocks.

A quick mini guide to dividend-related terms

Dividend Yield 

This is the annual cash dividend per share, divided by the current share price.

Dividend yield = (Dividend per share / Price per share) * 100

Payout ratio

It’s the ratio of earnings paid as dividends divided by the company’s total earnings.

Mathematically speaking, Payout Ratio = Dividends per share (DPS) / Earnings per share (EPS)

Wrapping Up

As a dividend investor, your earnings strongly depend on the company's fundamentals, as well as its dividend record, to be robust. A weak market, downturn, or slump should not prevent solid dividend-paying firms from paying their shareholders dividends.

If you’re someone who’s new to the whims of market, but still want returns not only through trading, but also through dividends, then it’s always best you get in touch with a professional who can guide you through dividend paying stocks, based on your budget, risk appetite and time horizon.

Frequently Asked Questions (FAQs)

Which are the best dividend-paying Indian stocks for the long term?

• Bharat Petroleum Corporation Limited
• Indian Oil Corporation Limited
• Indus Towers Limited
• Hindustan Petroleum Corporation Limited
• Coal India Limited
• SJVN Limited
• REC Limited
• Power Finance Corporation Limited
• Oil India Limited

Stocks listed here are well-established businesses, and some are even very profitable.

In the National Stock Exchange, which companies pays the most dividends?

• Aurum Proptech
• Clariant Chem
• BPCL
• Goodyear 
• PNB Gilts 
• Ksolves
• Kewal Kiran
• IOC
• REC 
• Tide Water Oil 
• Coal India
• Indus Towers 
• Power Finance Corporation Limited

Which businesses are the most stable?

• Bharat Petroleum Corporation Limited
• Indian Oil Corporation Limited
• Indus Towers Limited
• Hindustan Petroleum Corporation Limited
• Coal India Limited
• SJVN Limited
• REC Limited
• Power Finance Corporation Limited, and 
• Oil India Limited

Dividend-paying firms, by and large, are considered safe dividend stocks since they pay consistently, in most market conditions.

How can I select a dividend investment that pays a fair yield?

By checking websites that contain details of businesses offering good and steady returns.

How much is the eventual dividend?

It is published by the Board of Directors after posting its confidence in the company’s financial health and paid after the fiscal year has ended. Though not a formal resolution, once stated, a company does not go back.

Do mutual funds also pay dividends?

This depends on the stocks that the mutual fund is investing in. If the stocks that pay dividends are part of the fund, then the investor makes gains through mutual funds.

Is it mandatory for a company to pay dividends on shares?

No, it is not mandatory. It is a choice made by the company and its board to pay dividends as a sign of confidence to its investors.