Five Top Dividend Yield Stocks Of FY25 — Vedanta, DB Corp, MSTC And More

As the fourth quarter earnings season comes to an end and companies announce their final dividends for fiscal 2025, retail investors are particularly interested in stocks that have provided them with the highest share of profits.

Dividend yield is a financial ratio that shows how much money a company pays its shareholder in the form of dividends per share, in comparison to its stock price. The higher the number, the more rewarding the stock.

Based on NDTV Profit research, 15 stocks have offered a dividend yield of over 5% in FY25, comprising four large caps, three mid caps and eight small caps.

Mining major Vedanta Ltd. leads large-cap stocks with the highest dividend yield of 9.71%. The trailing twelve-month dividend yield, denoted as "TTM", includes all dividends paid during the past year in order to calculate the dividend yield. That stood at Rs 43.5.

The FY25 dividend of the Anil Agarwal-led company reflects strong cash flow generation with a total payout of Rs 13,474 crore. The in-line March quarter performance also supports the high dividend policy.

Besides, Vedanta has 11 'buy' calls from analysts, four 'hold' and only one 'sell' rating, according to Bloomberg data. The average of 12-month price targets indicates an upside potential of 15%.

Government-owned, diversified e-commerce services company MSTC Ltd. comes in at number two, with a dividend yield of 8.3% and a TTM dividend of Rs 45.5.

MSTC has declared six dividends since 2023, reflecting a growing yet volatile dividend policy, with a five-year average payout ratio of approximately 38%. However, the company currently lacks sufficient free cash flow to cover these dividends. This, combined with a high payout ratio in FY25, raises concerns about the sustainability of its dividend payments.

DB Corp has declared six dividends since 2023. The company's strong cash flow supports its dividend yields, even though it maintains a conservative dividend policy.

Moreover, its operational performance has enabled dividend payouts despite weaknesses in both revenue and profit. The payout ratio indicates the sustainability of these dividends.

Indian Oil Corp. subsidiary Chennai Petroleum Corp. has a strong but volatile dividend track record, having declared dividends in four of the last five years, which largely reflects the cyclical nature of its business.

The company's low payout ratio is a positive factor, enhancing the sustainability of its dividend payments. However, declining profits and margin volatility continue to pose ongoing risks to its financial performance.

Allcargo Logistics has a long history of dividend payments, having declared dividends 25 times since 2006. However, the company did not declare any dividends in FY24 due to ongoing restructuring efforts.

Despite this, a low payout ratio in FY25 suggests a focus on sustainability, contrasting with companies like Chennai Petroleum and Vedanta.

Nevertheless, concerns persist regarding the consistency of its dividend payments, stemming from historically low profits and the absence of a dividend in FY24.

Furthermore, its lower dividend yield and earnings volatility make it a less attractive option for investors primarily seeking consistent income.