4. Supreme Industries

This industry is known for offering a range of plastic products in India, operating in various segments like plastic piping systems and protective packaging products. The company has been on a high profit trajectory in the past 10 years, with its profits clocking a stellar compound annual growth of 28 percent. This has translated into a 41 percent CAGR in share price during this period.

Of late, Supreme has witnessed subdued growth due to a fall in PVC prices. However, PVC prices are expected to inch up following the imposition of anti-dumping duty on imports from China from September 2014. With the fall in crude oil prices, exhaustion of high-cost inventory and reduced imports from China, Supreme is expected to see an improvement in margins. It has also earmarked 250 crore for capital expenditure in the current financial year.

5. Asian Paints

The industry leader in paints, Asian Paints has a rich dividend-paying history stretching over many years. The company has paid an average 42 percent of its net profit as dividend in the past 10 years, while the stock has beaten the Sensex eight times in 10 years. Its ability to maintain a generous dividend payout stems from the consistent high cash flow it generates due to its superior pricing power made possible by its leadership position.

Even during the economic slowdown of 2009-14, the company's revenues clocked a compound annual growth of 18 percent. That the gross margin for Asian Paints expanded by 3.4 percent during this period of high inflationary pressure indicates the pricing power it enjoys. Its market share has also improved by 4 percent in terms of brand value, supported by a strong dealer network, an efficient supply chain, effective brand building and the launch of premium products. Going forward, the benign raw material prices and a high operating leverage are expected to expand the operating margins further. This makes analysts believe that the company is likely to continue its rich dividend payouts.