Most of the dividend by shareholders are received in the months of June and July. This is the time when there is book closure for dividends by most of the companies. Here is a list of 3 best dividend yielding shares that you can buy.

Union Bank of India

Union Bank of India: Quotes, News

BSE 172.200.4 (-0.23%)

NSE 171.990.35 (-0.20%)

Canara Bank: Quotes, News

BSE 127.050.3 (-0.24%)

NSE 127.040.26 (-0.20%)

This is pretty good considering that dividends are tax free in the hands of investors. The company has also reported a good set of quarterly numbers with asset quality improving both at the gross and the net level.

A good stock to buy for a turnaround in the economy.

Neyveli Lignite

This is another consistent dividend paying company. Neyveli has already declared dividends twice this year. Once in Feb and again in May. The total dividend is almost 28 per cent or Rs 2.8 per share. That is not the only reason to buy the stock. The company's shares at Rs 73 a share is still below book value. A 250-megawatt thermal power station-II has begun operations which should boost earnings significantly in the years to come.

At the current market price the dividend yield works to 4 per cent which is pretty decent.

Canara Bank

Canara Bank has declared a dividend of Rs 11 per share, which translated into a yield of 3 per cent at the current market price of Rs 340.

The bank has seen its asset quality deteriorate and the stock has fallen significantly in the last one month. However, there is reason to be optimistic on Canara Bank.

For one the company's asset quality is not as bad as some of its peers. Secondly, should there be an interest rate cut going ahead it would help boost the performance of Canara Bank. Also, going forward with an economic recovery, one can expect significant gains in a stock like Canara Bank.

Conclusion

Dividends will be received in these stocks in the months of June and July. So, you can grab these best dividend yielding shares now, though once they go ex dividend the stock price is likely to react.

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