Top Dividend-Paying PSU Stocks: Power Grid, HPCL, Union Bank & Oil India

Market Performance

Public Sector Undertakings (PSUs) have long been a favourite among investors seeking steady income along with potential capital gains. Over the past year, many PSU stocks have delivered dividends that are comparable to, or even higher than, traditional bank fixed deposits. This makes them attractive for those focused on regular income.

The broader PSU sector has also shown solid performance, with the BSE PSU index rising significantly over the last five years, driven by government reforms, policy support, and strong fundamentals across core sectors like oil, gas, power, and metals.

High Dividend-Paying PSU Stocks

Dividend-paying PSUs continue to stand out for their consistent payouts. Dividend yield represents the annual dividend income as a percentage of the stock’s current market price. Here’s a look at some of the top dividend-paying PSU stocks over the past 12 months:

Coal India Limited – Dividend ₹26.5 | Yield 7%

REC Limited – Dividend ₹19.7 | Yield 6%

Oil and Natural Gas Corporation Ltd (ONGC) – Paid a dividend of ₹12.3 per share, offering a dividend yield of 5%.

Power Finance Corporation Ltd (PFC) – Dividend ₹16.4 | Yield 5%

Bharat Petroleum Corporation Ltd (BPCL) – Dividend ₹17.5 | Yield 5%

Balmer Lawrie & Co Ltd – Dividend ₹8.5 | Yield 5%

GAIL (India) Ltd – Dividend ₹7.5 | Yield 4%

Shipping Corporation of India Ltd – Dividend ₹9.6 | Yield 4%

NMDC Ltd – Dividend ₹3.3 | Yield 4%

National Aluminium Co Ltd (NALCO) – Dividend ₹10.5 | Yield 4%

Meanwhile, several other PSUs continue to offer reliable dividends:

RITES Ltd – Dividend ₹7.9 | Yield 3%

Power Grid Corporation of India Ltd – Dividend ₹9 | Yield 3%

Hindustan Petroleum Corporation Ltd (HPCL) – Dividend ₹15.5 | Yield 3%

Union Bank of India – Dividend ₹4.8 | Yield 3%

Oil India Ltd – Dividend ₹12 | Yield 3%

These payouts demonstrate that PSUs not only provide regular income but also complement long-term investment strategies, particularly for risk-conscious investors.

Why Dividend Yields Matter

A higher dividend yield indicates attractive income potential, but it should be considered alongside the company’s financial health and the sustainability of earnings. PSU stocks, especially in sectors like oil, gas, and power, have maintained steady earnings and cash flows, making their dividends reliable over time.

Investors looking for stable income can consider stocks with dividend yields of 3% and above. While yields above 5% are generally seen as very attractive, even those offering 3–4% can be a consistent source of returns when combined with long-term capital growth.

Summary

PSU stocks remain a key choice for income-focused investors. Power Grid, HPCL, Union Bank of India, and Oil India are among the top dividend-paying companies, offering yields around 3%, while Coal India and REC Limited lead with 6–7% yields.

These companies offer a twofold benefit: regular dividend income and exposure to India’s expanding sectors such as energy, utilities, and financial services. With steady performance and strong fundamentals, dividend-paying PSUs remain an important component of diversified investment portfolios.