Best Monthly Dividend-Paying Stocks in India

Dividend yield measures the dividend income generated by a stock relative to its share price. It is calculated by dividing the annual dividend per share by the current market price per share, then multiplying by 100. When selecting top dividend stocks in India, investors seek those paying higher than average market yields.

The ideal picks offer stock price appreciation over time and consistent dividend payouts that grow steadily. By choosing stocks with reliable dividends and payout growth, investors can generate regular income for needs like retirement while still benefiting from long-term capital gains. The combination makes high-yielders attractive for income-oriented portfolios.

What are stocks to buy in the long term? 

Best long-term stocks usually have a proven track record of steady growth, firm foundations, and durability in different economic cycles. These stocks are often linked with established companies working in safe or rising industries, giving investors the potential for capital growth and, in some cases, regular income payouts over an extended time. 

Investing in long-term stocks takes patience, focus, and a complete understanding of the company's business plan, competitive environment, and growth prospects. These stocks are usually less unpredictable than their shorter-term peers, backed by good financials and a proven ability to handle market ups and downs. 

Top 10 Stocks to Buy for Long Term

Here are the top 10 monthly dividend stocks India that investors can consider for generating a steady income stream while benefiting from potential capital appreciation.

Performance Overview of Monthly Dividend Paying Stocks List

Dr Lal Path Labs

This healthcare giant provides diagnostic services. It has a dividend yield of 0.72% and a market capitalization of ₹27,408.59 Cr as of 23 October 2024. 1-year return: 34%

• Face Value: ₹10.00
• PE: 66.25
• PB: 13.9
• EPS: ₹49.50

Union Bank of India

This bank offers various financial services and has a market capitalization of ₹83,679.58 Cr as of 23 October 2024. 1-year return: 14.89%

• Book Value: ₹132.83
• Stock PE: ₹5.47
• ROCE: 21.30%
• EPS: ₹20.04

Britannia Industries

Manufacturing and selling food products, Britannia has a market capitalization of ₹1,38,776.27 Cr. 1-year return: 27%

• Face Value: ₹1.00
• PE: 64.82
• ROE: 62.07%
• EPS: ₹88.89

Polycab India

Polycab manufactures and sells wires and cables. It has a market capitalization of ₹1,00,466.88 Cr. 1-year return: 0.45%

• Face Value: ₹10.00
• PE: 57.88
• PB: 11.77
• EPS: ₹115.41

Punjab National Bank

Offering a range of banking services, Punjab National Bank has a market capitalization of ₹1,11,010.3 Cr. 1-year return: 38.88%

• Face Value: ₹2.00
• PE: 10.84
• PB: 1.02
• EPS: ₹8.91

Supreme Industries

Manufacturing plastic products, Supreme Industries has a market capitalization of ₹58,432.36 Cr. 1-year return: 6.38%

• Face Value: ₹2.00
• PE: 57.29
• PB: 12.48
• EPS: ₹80.09

Happiest Minds Technologies

Providing IT services, Happiest Minds Technologies has a market capitalization of ₹11,857.64 Cr. 1-year return: -4%

• Face Value: ₹2.00
• PE: 51.08
• PB: 7.82
• EPS: ₹15.24

Balkrishna Industries

Manufacturing tires, Balkrishna Industries has a market capitalization of ₹57,022.77 Cr. 1-year return: 14.77%

• Face Value: ₹2.00
• PE: 35.58
• PB: 6.11
• EPS: ₹82.90

Dalmia Bharat

Manufacturing cement, Dalmia Bharat has a market capitalization of ₹33,144.35 Cr. 1-year return: -15.77%

• Face Value: ₹2.00
• PE: 263.05
• PB: 4.11
• EPS: ₹6.72

Indian Hotels Company

Providing accommodations and food services, Indian Hotels Company has a market capitalization of ₹93,939.41 Cr. 1-year return: 68%

• Face Value: ₹1.00
• PE: 84.21
• PB: 9.07
• EPS: ₹7.84

Factors To Consider Before Investing In Monthly Dividend Paying Stocks

Now you know which shares give dividends every month, let’s understand key factors to consider when investing in the highest dividend-paying stocks in India.

Earning a passive income or even a steady stream of income using dividends seems attractive. However, there are certain factors that need to be considered. Listed below are the factors that you, as an investor, should consider before investing in monthly dividend-paying stocks in India:

• Financial Health of the company: Before investing in dividend stocks, it is crucial to check the financial condition of the company. Review financial statements to ensure a stable and consistent flow of cash.
• Dividend stability: Checking the stability of dividends is important. Review the company's dividend history to see if it has a consistent track record, or if the dividend has been volatile.
• Dividend Yield: The percent of the share price paid in dividends annually is known as the dividend yield. Compare it with other companies to determine if it's competitive.
• Industry Trends: Stay updated on industry trends to ensure your investments align with market changes and upcoming trends.
• Growth prospects: Research growth prospects of the company to determine if dividends may increase over time.

How to Invest in the Highest Dividend Paying Stocks?

• Research companies with steady or increasing dividend payments to identify reliable high-yielders.
• Check the dividend yield and focus on stocks yielding higher than benchmark averages.
• Analyse financial health through metrics like earnings growth, low debt ratios, and strong cash flows.
• Understand the business model and industry outlook to identify reliable companies.
• Review valuation ratios like P/E ratios to balance high yields with long-term share price appreciation.
• Build a diversified portfolio across sectors to manage risks.
• Reinvest dividend payments to compound returns over time.

Advantages of the Highest Dividend Paying Indian Stocks

• Higher Total Returns: Dividend income and capital appreciation can outperform low-dividend stocks in the long run.
• Lower Risk: Dividend stocks from stable companies offer less volatility.
• Inflation Protection: Growing dividends help protect against inflation.
• Tax Advantages: Dividends may be taxed lower than other incomes, providing tax benefits.

Risks Associated with High Dividend Stocks

• Unsustainable Payout Ratios: High payout ratios may indicate future instability.
• Slow Growth: Some companies may pay higher dividends but offer slow growth.
• Dividend Cuts: Companies facing financial stress may reduce or eliminate dividends.

Conclusion

Monthly dividend-paying stocks can be a lucrative addition to your portfolio, providing regular income and long-term growth potential. However, careful research into financial stability, payout sustainability, and industry trends is essential before making an investment decision.