In the last five years, the total dividend payout, including share buyback, by listed companies in India has grown at a compound annual growth rate (CAGR) of 12 per cent. Listed companies paid around ₹5.06 trillion to their shareholders in
financial year (FY26), up from ₹2.87 trillion five years ago in FY21.
This translated into a dividend yield of just 1.3 per cent in FY26, which seems minuscule considering daily fluctuations in the share price of companies. However, many high dividend paying companies currently offer dividend yields of 4 per cent or higher. In other words, investors can easily create a portfolio that can give them annual dividend income of ₹5,000 for an investment of ₹1 lakh in the first year itself. This dividend yield compares favourably with current rental yields on real estate
investment or bank fixed deposits.
Besides, these high dividend paying stocks are also likely to provide capital appreciation, as their share price rises
in line with growth in their earnings and dividend payout.
On the flip side, there has been a slowdown in dividend payout in the last two years, after a dividend boom in the post-Covid-19 period. This is largely due to a cut in payout ratio, as many high payers are now conserving cash either for capex or rainy days. The current slowdown in payout provides the right opportunity to accumulate high dividend paying stocks.
Here are 10 high dividend yield stocks from the BSE500 universe that have the potential to grow their payout in future. These stocks offer dividend yield in the range of 3.5 per cent to 6.1 per cent, with average yield of 4.9 per cent. The combined dividend payout by these companies was up 13 per cent, while their combined adjusted net profit rose 5 per cent in FY26. In all, these 10 companies paid dividends worth ₹1.12 trillion to their investors in FY26, accounting for 56.3 per cent of their adjusted net profit.
Besides high dividend yield, these 10 stocks offered the best combination of revenue and earnings growth in the last three years, higher return on equity, low equity valuation and a strong balance sheet.
Tata Consultancy Services
Power Finance Corporation
