Exploring Better Dividend Options Beyond Rashtriya Chemicals And Fertilizers With One Attractive Alternative

In This Article:

In the dynamic realm of India's equity markets, dividends can serve as a beacon for investors seeking steady income. However, not every company promising dividends guarantees growth or stability in these payouts. For instance, firms like Rashtriya Chemicals and Fertilizers have seen their dividends diminish over time, presenting a less favorable option for those focused on long-term dividend growth.

Top 10 Dividend Stocks In India

Name

Dividend Yield

Dividend Rating

Balmer Lawrie Investments (BSE:532485)

4.01%

★★★★★★

Gulf Oil Lubricants India (NSEI:GULFOILLUB)

3.10%

★★★★★☆

D. B (NSEI:DBCORP)

3.57%

★★★★★☆

Indian Oil (NSEI:IOC)

8.17%

★★★★★☆

Bharat Petroleum (NSEI:BPCL)

6.85%

★★★★★☆

ITC (NSEI:ITC)

3.17%

★★★★★☆

HCL Technologies (NSEI:HCLTECH)

3.41%

★★★★★☆

VST Industries (BSE:509966)

3.66%

★★★★★☆

Redington (NSEI:REDINGTON)

3.34%

★★★★★☆

PTC India (NSEI:PTC)

3.58%

★★★★★☆

Click here to see the full list of 16 stocks from our Top Dividend Stocks screener.

Let's review one of the notable picks from our screened stocks and one not so great.

Top Pick

PTC India

Simply Wall St Dividend Rating: ★★★★★☆

Overview: PTC India Limited operates in the power trading sector across India, Nepal, Bhutan, and Bangladesh with a market capitalization of approximately ₹64.53 billion.

Operations: The company's revenue is primarily derived from power trading, generating ₹160.12 billion, and a financing business contributing ₹7.67 billion.

Dividend Yield: 3.6%

PTC India's dividend yield of 3.58% ranks in the top 25% of Indian dividend payers, contrasting sharply with companies experiencing declining dividends. Despite a volatile dividend history over the past decade, PTC's dividends are well-supported by both earnings and cash flows, with a payout ratio of 54% and a cash payout ratio of only 9.4%. Recent executive changes and regulatory actions add an element of uncertainty to its management stability.

NSEI:PTC Dividend History as at Jul 2024
NSEI:PTC Dividend History as at Jul 2024

One To Reconsider

Rashtriya Chemicals and Fertilizers

Simply Wall St Dividend Rating: ★★☆☆☆☆

Overview: Rashtriya Chemicals and Fertilizers Limited, operating in India, is engaged in the manufacturing, marketing, and selling of fertilizers and industrial chemicals, with a market capitalization of approximately ₹112.51 billion.

Operations: The company's revenue is derived from trading (₹42.62 billion), fertilizers (₹109.97 billion), and industrial chemicals (₹17.10 billion).

Dividend Yield: 0.6%

Rashtriya Chemicals and Fertilizers (RCF) faces challenges with its dividend strategy, marked by a declining trend in dividend payments over the past decade and a current yield of 0.61%, which is below the top quartile of Indian dividend payers at 1.11%. Additionally, RCF's dividends are not well supported by earnings or cash flow, indicating potential sustainability issues. Recent senior management changes could inject uncertainty into strategic directions, further complicating its appeal as a stable dividend stock.