Five safe dividend stocks to beat inflation in India

These stocks have been selected using the following criteria:

#1 Coal India

Coal India is the single largest coal producer in the world. Spread across eight Indian states, CIL operates in 85 mining areas, managing a total of 295 working mines.

The company accounts for 55% of total power generation and meets 40% of the country's primary commercial energy requirements. It contributes to 75% of total domestic coal production and 75% of total coal-based power generation.

Coal India has one of the highest average dividend yields, while its dividend per share (DPS) has increased from ₹17.00 in FY22 to ₹26.50 in FY26.

Furthermore, its five-year average dividend yield was 7.81%.

The company also meets the reserve filter with ₹14,493 m in reserves.

Since 2011, Coal India has declared 35 dividends, highlighting its long-standing track record of returning cash to shareholders.

#2 REC

REC is a'Maharatna'company under the administrative control of the power ministry.

It is non-banking finance company (NBFC), public financial institution and infrastructure financing company (IFC). REC provides long-term loans and other financing products to the state, Centre and private companies for the creation of infrastructure assets in the country.

REC has delivered a steady increase in dividend per share over the five-year period. DPS rose from ₹11.50 in FY22 to ₹18.55 in FY26, while the average dividend yield stood at 7.43%.

Its total reserves of ₹81,099 m also provide a strong financial base for the dividend-focused screen.

This makes REC a stock to watch amid rising inflation.

#3 Power Finance Corp

Power Finance Corp is a Schedule-A Maharatna CPSE and India's largest NBFC.

PFC provides comprehensive financial solutions to power sector entities, from project term loans for generation and transmission assetsto policy-aligned programs such as RDSS.

PFC has recorded a consistent rise in DPS, increasing every year from ₹9.60 in FY22 to ₹18.55 in FY26.

Its five-year average dividend yield was 6.31%, comfortably above the 5% screening threshold. The company also had total reserves of ₹9923 crore.

Since 2007, the company has declared 49 dividends.

#4 Indian Oil Corp

IOCL is a central public sector undertaking under the ownership of the petroleum and natural gas ministry.

The company operates a group refining capacity of over 80.75 MMTPA, representing the largest share of refining capacity in India.

IOC qualifies with a five-year average dividend yield of 5.82% and maintained dividend payouts across the period.

While its DPS has fluctuated from year to year, it stood at ₹7.00 in FY26. The company also has a substantial reserve base of ₹19077 crore.

IOC has maintained its dividend payouts over the years, supporting its place on this inflation-beating dividend stock list.

#5 ONGC

Maharatna ONGC is the largest crude oil and natural gas company in India, contributing around 71% to Indian domestic production.

The company has in-house service capabilities in all areas of Exploration and Production of oil & gas and related oilfield services.

ONGC has one of the most consistent dividend trends among the selected stocks.

Its DPS increased annually from ₹10.50 in FY22 to ₹13.25 in FY26, while the five-year average dividend yield was 5.61%.

Its total reserves of ₹32,548 crore are also the highest among the five companies selected.

ONGC has declared 64 dividends since 2000. Its consistent dividend track record supports its place on this inflation-beating dividend stock list.

Conclusion

While the exact inflation figure is yet to be announced, rising prices continue to put pressure on the purchasing power of money.

Dividend-paying stocks with a strong payout history and healthy yields offer an additional source of income for investors.

However, dividend history does not guarantee future payouts, so investors should also consider earnings, cash flows, debt levels, corporate governance and valuations before making an investment decision.

This article is syndicated from Equitymaster.com

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