3 companies that could pay big dividends

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Subscribe to enjoy similar stories. Remember the story of the man who killed the golden goose? In his greed to get more, he kills his steady source of gold. Some investors tend to make a similar mistake when they invest all their money in growth stocks, chasing only big gains.

Investors often forget that they expose themselves to risks of very large drawdowns from time to time. Like the man, who would have been better off keeping the goose alive, investors are often safer diversifying into dividend stocks. These stocks tend to give comparatively stable income, capital growth at a milder pace (as compared to growth stocks), and also serve as a cushion during market downturns (as risk off works in their favour).

Growth stocks are often the most popular and hotly debated choice among investors, but for many, dividend stock investing should be just as effective. In general, companies with cash flows and strong financial health tend to have a history of declaring regular dividends. When we talk about dividend stocks it would be hard not to mention public sector undertakings (PSUs).

They often pay stable dividends compared to private companies. Oil companies are high on the list of PSUs. Since crude oil prices are benign, bordering on low, it becomes important to look at these oil companies because declining crude oil prices might lead to potentially bigger dividends.

Let's examine three oil PSUs that may pay big dividends as crude oil prices decline. Bharat Petroleum Corporation (BPCL) is India's second-largest government-owned downstream oil producer. It operates three refineries in Bina, Kochi and Mumbai.