GNFC, ChennaiPetro And IGL Among State-Owned Stocks With High Dividend Yields

Since the allowance of 100 per cent Foreign Direct Investment (FDI) in certain sectors and government-owned corporations last year, there has been an exponential rise in the capital infusion towards government companies in India. The Modi-led BJP government in India have taken appropriate steps for pulling both Foreign and Domestic Institutional Investments, ensuring that retail investors can gain hefty profits through these stocks along with the Government of India.

Dividends received by holding positions in these companies are one of the highest revenue sources for the central and state governments, signalling the potential for investors to earn comparably better dividend yields by investing in these government-backed stock investments.

Dividend earnings are one of the key factors that both institutional and retail investors watch out for when finalising the list of companies to invest in. India's GDP has a robust forecast and the potential for increasing business activities would enable there to be surging profit reported in the years to come. In this article, we have short-listed the best dividend-yielding government stocks to add on to your list. strong financial system of the country enables these government corporations to have increased investments and growth year on year.

The rate at which the companies pay dividends earnings to its shareholders is the dividend yield of the company. If the company delivers a high dividend yield as a strong pillar for investing in the company. The higher yield indicates a higher return gained by investors apart from the surging value of the stocks. On the other hand, the dividend payout ratio notifies how much dividend is paid to shareholders during a year, compared to the net income or profit of the organisation. As per the dividend amount paid per share, the list of government stocks below has delivered some of the best dividend returns for Indian retail investors in 2023. Investors can add these stocks for robust dividend returns apart from the surging share prices expected in 2024.

Gujarat Narmada Valley Fertilizers & Chemicals Ltd (GNFC)

GNFC is one of the high-earning corporations owned by the Gujarat state government. The company's quarterly earnings for December 2023, are scheduled for 8th February 2024. The government-owned company has offered only one final dividend payment for investors in the year, amounting to 300% or Rs. 30/- per share. Considering the current share prices at Rs. 711/-, the dividend yield by the share is 4.2%.

Chennai Petroleum Corporation Ltd. (Chennpetro)

Chennai Petroleum Corporation is a subsidiary of Indian Oil Corporation, under the direct ownership of the Ministry of Petroleum. The company in the previous calendar year offered a single final dividend payout of Rs. 27 per share. The share price of Chennpetro on February 5th, 2024 is Rs. 933.5/-, providing a 2.89% dividend yield for the year.

Indraprastha Gas Limited (IGL)

Indraprastha Gas Ltd is a joint venture between the Gas Authority of India, Bharat Petroleum and the Government of Delhi to supply natural gas, cooking and vehicle fuel for the Delhi NCR. The potential for the share prices to surge this year is quite strong, eyeing to the consistent consumption and increasing demand. The company is offering a strong dividend payout to investors of 850% or Rs. 17/- per share. The current share price of IGL is Rs. 441/-, which turns out to be a 3.85% dividend yield for the year in total.

Rural Electrification Corp (REC)

REC is among the top earning government stocks, awarded with a 'Maharatna' status, which means the company's total revenue and net profit exceeds most other government organisations. In the calendar year 2023, the company delivered a stock price surge of almost 4x times. The dividends offered for the year is amounting to Rs. 14.1/- per share or 141%. The dividend yield recorded for the company, considering the current share price of Rs. 500/- is 2.82% in 2023.

Power Finance Corporation (PFC)

The government-backed finance institution is the largest funding institution for the government of India, ensuring strong capital infusion in state and central government projects. The consistent investments in major power projects of the country make PFC a gleaming stock for retail investors looking out for exponential share price surge as well as appropriate dividend returns. In 2023, the company offered dividend payments totalling up to 125% or Rs. 12.5/- per share. Another reason for the stock to be glitter is the yearly return of more than 250% for the year 2023. The current share price of PFC on 15th February 2024 is Rs. 458.15/-, delivering a yearly dividend yield of 2.72%.