For investors seeking a balanced strategy that combines consistent income and significant growth, high dividend-yield stocks are an ideal choice. These stocks not only offer steady cash flow through regular dividends but also provide substantial growth opportunities, enabling investors to enjoy a dual benefit. High dividend yield stocks can help mitigate risks while outperforming traditional market approaches, making them a smart addition to any portfolio. Below are four high dividend yield stocks that not only provide attractive dividend payouts but also offer substantial upside potential, making them ideal candidates for your watchlist.
1. NMDC (National Mineral Development Corporation)
Founded in 1958 and headquartered in Hyderabad, NMDC is India’s largest iron ore producer and operates under the Ministry of Steel. With mines in Chhattisgarh and Karnataka, NMDC produces over 30 million tonnes of iron ore annually. The company’s dominance in the iron ore market positions it as a key player in India’s steel production ecosystem. However, NMDC is not just resting on its laurels—it is actively diversifying its portfolio, venturing into other minerals like diamonds and exploring new sectors to ensure long-term growth.
The company has undertaken several initiatives to modernize and expand its operations, which include enhancing mining infrastructure, implementing sustainable practices, and increasing capacity. The long-term growth potential of NMDC is tied to the increasing demand for steel in India, especially as the country invests in large-scale infrastructure projects and urbanization. The company is planning to ramp up its production capacity to 100 million tonnes per annum by FY30, which will further boost its market presence.
Motilal Oswal has a “BUY” recommendation on NMDC with a target price of Rs. 290, suggesting an upside potential of 23% from the current price of Rs. 235.69. This upside is driven by rising steel demand, capacity expansion, and major capital expenditure (capex) projects aimed at improving production and infrastructure. With its strong positioning in the iron ore sector and ongoing expansion plans, NMDC is set to generate sustainable returns for investors in both dividends and capital appreciation.
2. Coal India
Coal India Limited (CIL), established in 1975 and headquartered in Kolkata, is the world’s largest coal producer and one of India’s most important state-owned enterprises. CIL operates more than 350 mines across the country and produces around 600 million tonnes of coal annually, playing a pivotal role in supplying energy to India. The company has a strategic role in India’s energy infrastructure and is an essential supplier to power plants, cement factories, and industries reliant on coal.
While coal remains CIL’s core business, the company is actively working toward diversification by investing in renewable energy projects, particularly in wind and solar energy. This diversification is part of its long-term strategy to align with global sustainability goals while continuing to fulfill India’s growing energy needs. Despite challenges such as price fluctuations and reduced volumes in some quarters, CIL continues to maintain a strong dividend yield and has shown resilience in adapting to market changes.
Sharekhan has a “BUY” rating for Coal India with a revised target price of Rs. 560, indicating an upside of 32.6% from the current share price of Rs. 422.10. The potential upside is driven by a strong volume growth outlook, the possibility of price hikes in Fuel Supply Agreements (FSAs), and its consistent ability to generate high dividends. Even though the company faced a soft quarter with reduced realizations and volumes, its diversified energy strategy, high dividend yield, and growth potential make it a solid addition to any dividend-focused investment portfolio.
3. Hero MotoCorp
Hero MotoCorp, headquartered in New Delhi, is the world’s largest manufacturer of two-wheelers, offering a wide range of motorcycles and scooters for various consumer segments. Founded in 1984, the company became an independent entity in 2010 after Honda’s exit, and since then, Hero MotoCorp has firmly established itself as a leader in the Indian two-wheeler market. The company’s success is built on its ability to cater to diverse customer needs, including offering affordable models, high-performance motorcycles, and electric vehicles (EVs).
Hero MotoCorp has shown strong resilience in maintaining its market leadership, particularly through its focus on rural markets, where two-wheelers are a vital mode of transportation. The company is also making significant strides in the electric vehicle market, with plans to expand its EV portfolio in the coming years. Hero MotoCorp’s investment in research and development ensures that it stays at the forefront of innovation, especially as consumer preferences evolve toward sustainable mobility solutions.
Axis Securities has a “BUY” rating on Hero MotoCorp with a target price of Rs. 5,845, which reflects a 24.5% upside from the current price of Rs. 4,695.80. This growth is expected to come from a strong rural recovery, volume growth driven by the festive season, and the launch of new products. Hero MotoCorp’s focus on EVs further strengthens its long-term prospects, and its ability to maintain healthy margins and strong cash flow makes it an attractive stock for both dividends and capital appreciation.
4. Tata Steel
Tata Steel, a flagship company of the Tata Group, is one of India’s largest steel producers and a global leader in the steel industry. The company operates integrated steel plants in India and abroad, with an annual production capacity exceeding 30 million tonnes. Tata Steel plays a critical role in India’s industrial growth, with its steel products being used in various sectors, including automotive, construction, and engineering.
Tata Steel is recognized for its commitment to sustainability, including efforts to reduce its carbon footprint and adopt innovative technologies to improve efficiency. The company has also undertaken major capital projects in India to enhance production and expand its market reach. While its European operations face some challenges, Tata Steel’s Indian operations continue to perform strongly, with a focus on increasing profitability through efficiency improvements and decarbonization efforts.
Axis Securities has upgraded Tata Steel to a “BUY” rating with a target price of Rs. 175, indicating an upside of 19.4% from the current price of Rs. 146.53. The growth prospects are primarily driven by strong domestic performance, despite challenges in Europe. The company’s ramp-up of the KPO-II project is expected to boost profitability, and its de-leveraging efforts in FY26 will strengthen its balance sheet and improve cash flow. Tata Steel’s focus on sustainability, coupled with its strong position in India, positions the company for long-term growth and profitability.
Conclusion
High dividend yield stocks that also offer substantial growth potential are an excellent way to generate income while positioning your portfolio for future capital appreciation. The four stocks highlighted above—NMDC, Coal India, Hero MotoCorp, and Tata Steel—offer both attractive dividend payouts and significant upside potential. Whether it’s through strong domestic demand, diversification into new sectors, or ongoing investments in innovation, these companies are well-positioned for long-term success. Adding them to your watchlist could help balance your investment strategy by providing both steady dividends and the opportunity for capital growth, ultimately enhancing your portfolio’s performance.
