Generally, blue-chip companies do not pay very high dividends as most of the cash is preferred to be used for future growth plans. However, some stocks, especially government-owned entities are very good dividend payers that can be good bets for a long-term passive income portfolio.
In case you are looking for both the safety of large caps and a high dividend yield like a mid or small-cap, here are my 3 top picks.
Vedanta Limited
Vedanta Ltd (NS:VDAN) is without a doubt my favorite dividend stock. Hands down. It is a natural resources company with a market capitalization of INR 1,03,059 crores, making it the 55th largest company on the NSE. It will surprise you that this dividend machine is currently trading at an eye-popping yield of 36.64%.
In fact, had you bought Vedanta shares in 2021, at around INR 150, your entire investment would have doubled in dividends alone. The main reason for such gigantic payouts is to help its parent company to service its debt and therefore, this eye-catchy yield might not sustain in the future.
Coal India Limited
Coal India Ltd (NS:COAL) is a government-owned mining giant, with a market capitalization of INR 1,42,852 crores, making it the 37th largest company on the NSE. It is almost a monopoly stock and clocked an all-time high revenue of INR 1,44,802.57 crores in FY23, which is higher than its current market cap.
It is the highest dividend-paying company in the benchmark Nifty 50 index, currently trading at a mouth-watering yield of 10.46%. But not just that, the stock could also be a good bet for value seekers looking at its very low P/E ratio of 5.07. There is good support around INR 208 - INR 210 which could be a nice accumulation zone for long-term investors.
Oil and Natural Gas Corporation Limited
Oil And Natural Gas Corporation Ltd (NS:ONGC) is a government-owned oil and natural gas explorer, with a market capitalization of INR 2,02,794 crores, making it the 28th largest entity on the Indian bourses. The company posted a record-high revenue of INR 6,92,937.36 crores in FY23 and a net income of INR 35,440.48 crores.
Over the last three fiscal years, the company has maintained a decent payout ratio of 0.32 and is currently trading at an inflation-beating yield of 6.98%. It is also trading at less than its book value, with a P/B ratio of 0.72, which is the lowest in the Nifty 50 list.
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