Over the past year, the Indian stock market has shown robust growth with a 45% increase, although it has remained flat in the last week. In this dynamic environment, dividend stocks like Bank of Baroda stand out as attractive options for investors looking to benefit from consistent income combined with potential capital appreciation, especially given the expected annual earnings growth of 16%.
Overview: Bank of Baroda Limited is a global banking institution offering a wide range of services to individual, government, and corporate clients, with a market capitalization of approximately ₹1.30 trillion.
Operations: Bank of Baroda Limited generates revenue primarily through Treasury (₹322.05 billion), Corporate/Wholesale Banking (₹495.75 billion), and Retail Banking, which includes Digital Banking (₹0.01 billion) and Other Retail Banking (₹490.88 billion).
Dividend Yield: 3%
Bank of Baroda's recent dividend announcement of INR 7.60 per share, coupled with a solid earnings report for FY 2024, underscores its potential as a dividend stock. However, the bank's history of volatile dividends and a high level of bad loans (2.9%) pose risks. The recent executive changes and regulatory scrutiny, including a significant tax demand which the bank is contesting, add elements of uncertainty to its operational stability. Despite these challenges, the dividends are currently well-covered by earnings (20.9% payout ratio), suggesting some resilience in its financials amidst ongoing issues.
Overview: D. B. Corp Limited operates in newspaper printing and publishing, radio broadcasting, and provides digital news platforms and event management services globally, with a market cap of approximately ₹68.68 billion.
Operations: D. B. Corp Limited generates revenue primarily through its printing and publishing business, which contributes ₹22.43 billion, and its radio segment, which adds another ₹1.59 billion.
Dividend Yield: 3.4%
D. B. Corp Limited's recent dividend increase to INR 8 per share reflects a positive step, though its history of fluctuating dividends raises caution. The company reported significant growth in net income to INR 4,255.23 million and an earnings surge by 151.7% over the past year, supporting the sustainability of its dividends with a payout ratio of 54.4% and cash payout ratio at 43.6%. However, the appointment of a new President Finance amidst these changes could introduce variables affecting future dividend reliability.
Overview: Oil and Natural Gas Corporation Limited, operating both domestically and internationally, is engaged in the exploration, development, and production of crude oil and natural gas with a market capitalization of approximately ₹3.86 trillion.
Operations: Oil and Natural Gas Corporation Limited generates revenue primarily through refining and marketing (₹56.75 billion), offshore exploration and production (₹9.43 billion), onshore exploration and production (₹4.39 billion), and international operations (₹0.96 billion).
Dividend Yield: 4%
Oil and Natural Gas Corporation Limited (ONGC) has shown a mixed performance in dividend reliability, with some volatility over the past decade. However, recent financials indicate a positive trend, with earnings growing by 38.9% over the last year. The company's dividends are well-covered by both earnings and cash flows, with payout ratios of 31.3% and 32.5%, respectively. Despite this coverage, the historical instability in dividend payments suggests cautious optimism for future consistency. The recent appointment of Shri Vivek Chandrakant Tongaonkar as CFO could influence financial strategies moving forward.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
