Coal India

At a market price of Rs 280, Coal India gives you a dividend yield of 7.5 per cent, which is the same as the State Bank of India fixed deposit.

Importantly however, interest earned on fixed deposits is taxed, while dividends are tax free in the hands of investors.

Also remember, that shares have the potential to rise giving you solid capital appreciation, while fixed deposits can only offer you interest.

Coal India is a cash rich, dividend paying company and we expect the company to maintain the dividend going forward, considering its virtual monopoly business.

NMDC

NMDC has to be the best bet when it comes to dividend yield among the stronger companies. Again, a cash rich dividend company. Last year the company declared a dividend of 855 per cent and if it maintains the same dividend, the yield goes up to huge 9.66 per cent.

Again, tax free dividend income from a cash rich company. At Rs 89, the stock has fallen from levels of Rs 170, thus giving you the potential to also earn capital appreciation.

Oil India

Crude oil after slumping, has once again been on the rise. The Oil India stock has been rallying a little lately.

However, the dividend yield on the stock is still rather healthy at near 7 per cent on a market price of  Rs 326.

This is one company that may still maintain its dividend and the stock also has the potential to rally, if a rally in crude oil takes place. A great stock to own for people who are likely to retire.

Noida Toll Bridge

Noida Toll Bridge runs the toll bridge from Delhi to Noida. The stock is currently traded at Rs 22, and the company has declared a dividend of 30 per cent last year, taking the yield to the near 12 per cent mark.

The toll business of the company maybe slightly impacted, due to the odd even formula by the government of Delhi.

However, even if the company reduces the dividend by 10 per cent, the stock will still have a dividend yield of near 10 per cent.

Federal Bank

It may not always be possible to get dividend yields like Coal India and NMDC. However, you seldom see private sector banking stocks giving a dividend yield of 5 per cent.

At the current market price of Rs 48, Federal Bank not only offers a good dividend yield, but, the share price also has the potential to go higher.

So, it could be a win win situation on both counts.

Karnataka Bank

Karnataka Bank is one of the stocks that is fundamentally very attractive. It is a private sector bank that is quoting a p/e of just 5 times and a price to book value of 0.64 times.

Apart from this the bank declared a dividend of Rs 5 per share and if it maintains the same dividend the yield is almost 4.5 per cent.