Highest Dividend Paying PSU Stocks In India 2026: India’s public sector companies have long been known for offering steady dividends and reliable returns. In 2026, several PSU stocks continue to attract income-focused investors due to strong profits, government backing, and consistent cash flow generation. These companies operate in sectors like energy, mining, power, and finance, making them important pillars of the economy.
Dividend yields from leading PSUs often range between 4% and 9%, which is higher than many traditional savings options. Coal India, ONGC, and IOC remain among the top contributors in terms of payout. Stable earnings and regular distributions make these stocks appealing for long-term investors seeking passive income in 2026.
Top Dividend Paying PSU Stocks In India 2026
Public sector companies such as Coal India, ONGC, REC, PFC, and Indian Oil Corporation continue to rank among the highest dividend-paying stocks in India. Their strong operational performance and large market presence allow them to maintain steady dividend policies even during market fluctuations.
These companies regularly announce interim and final dividends, supported by strong profits. Investors prefer them for consistent income and long-term stability. Dividend yields from some PSUs have reached between 6% and 9% in recent years, making them attractive compared to many fixed-income instruments.
Key Reasons PSU Companies Offer High Dividend Yields
PSU companies often share a significant portion of their profits with shareholders. Government ownership plays a major role in encouraging regular dividend distribution, as it helps generate revenue for the public treasury and maintain investor confidence.
Many PSUs operate in mature industries with stable demand, such as energy, mining, and utilities. Since capital expenditure needs are predictable, they can afford to distribute a larger share of profits. This creates a consistent income opportunity for investors looking for steady returns.
Highest Dividend Paying PSU Stocks In India 2026 Overview
| PSU Company | Sector | Approx Dividend Yield 2026 | Key Strength |
|---|---|---|---|
| Coal India | Mining | 6%–7% | Strong cash flow |
| ONGC | Oil & Gas | 5%–6% | Stable production income |
| REC Ltd | Power Finance | 4.5%–6% | High lending returns |
| PFC Ltd | Power Finance | 5%–6% | Government-backed funding |
| Indian Oil | Refining | 6%–9% | Large refining margins |
| BPCL | Oil Marketing | 5%–6% | Regular payouts |
| GAIL India | Gas Utility | 4%–5% | Pipeline revenue stability |
| NMDC | Mining | 3%–5% | Commodity-driven profits |
Coal India Dividend Performance And Market Position
Coal India remains one of the most consistent dividend-paying PSU stocks in India. Its dominant position in coal production ensures stable earnings, helping the company declare regular dividends over the years. The company benefits from strong domestic demand and government support.
In recent years, Coal India has maintained a dividend yield between 6% and 7%. Its large profit base allows frequent dividend announcements. For income-focused investors, it is often considered a core holding in a PSU dividend portfolio.
ONGC Earnings Strength Supporting Dividend Stability
ONGC continues to play a major role in India’s oil and gas production. Its upstream operations provide a steady revenue stream, allowing the company to maintain regular dividend payments even during energy price fluctuations.
The company has delivered dividend yields of around 5% to 6% in recent times. Its strong reserves, production capacity, and government backing help maintain financial stability. This makes ONGC a preferred PSU stock for long-term income investors.
Power Finance PSU Stocks With Consistent Payouts
REC Ltd and Power Finance Corporation are known for their steady dividend history. These companies provide financing to power and infrastructure projects, generating stable interest income and consistent profits over time.
Their dividend yields generally range between 4.5% and 6%. Strong loan portfolios and government-backed projects support their financial health. Investors often choose these stocks for regular income and potential capital appreciation.
Oil Marketing PSU Stocks Offering Attractive Returns
Indian Oil Corporation and BPCL are among the top dividend-paying oil marketing companies. Their large refining capacity and nationwide distribution network help generate strong revenues, especially when refining margins are favorable.
Dividend yields in this sector can reach between 5% and 9%, depending on market conditions. These companies also benefit from consistent fuel demand across India, which helps maintain earnings stability and regular dividend distributions.
Gas And Mining PSU Companies With Steady Cash Flow
GAIL India and NMDC operate in industries with long-term demand and strong pricing power. GAIL earns revenue through gas transmission and infrastructure, while NMDC benefits from iron ore mining operations.
Their dividend yields typically range from 3% to 5%. Stable operations and low production costs help maintain profitability. These companies are often included in diversified dividend portfolios for additional income stability.
Factors That Influence PSU Dividend Payments
Dividend payouts depend on company profits, commodity prices, and government policies. When profits rise, PSUs often increase dividend distribution to shareholders. However, market cycles in oil, gas, and metals can affect yearly payouts.
Government ownership also plays a role in dividend decisions. Public sector firms may distribute higher dividends to support public revenue. This creates a predictable pattern of regular income for long-term investors.
How Investors Can Build A Strong PSU Dividend Portfolio
Investors often select a mix of PSU stocks across sectors like mining, energy, and finance. Diversification helps balance risk while ensuring regular income from multiple sources. Choosing companies with consistent profit growth improves long-term returns.
It is important to focus on stable earnings, strong balance sheets, and reliable dividend history. Combining high-yield stocks like Coal India, ONGC, and REC can create a steady income stream while maintaining long-term investment value.