The Indian market has shown remarkable growth, surging 46% over the past year and gaining 3.8% in just the last week, with earnings expected to grow by 17% annually. In this buoyant environment, identifying top dividend stocks that offer both stability and potential income can be particularly rewarding for investors.
Top 10 Dividend Stocks In India
Name
Dividend Yield
Dividend Rating
Bhansali Engineering Polymers (BSE:500052)
4.03%
★★★★★★
Castrol India (BSE:500870)
3.85%
★★★★★☆
HCL Technologies (NSEI:HCLTECH)
3.86%
★★★★★☆
Indian Oil (NSEI:IOC)
8.49%
★★★★★☆
Balmer Lawrie Investments (BSE:532485)
3.66%
★★★★★☆
Gujarat Narmada Valley Fertilizers & Chemicals (NSEI:GNFC)
Overview: Coal India Limited, along with its subsidiaries, engages in the production and marketing of coal and coal products across India, boasting a market capitalization of approximately ₹2.89 trillion.
Operations: Coal India Limited generates approximately ₹130.33 billion from its coal mining and services segment.
Dividend Yield: 5.4%
Coal India Limited (CIL) has recently shown a robust increase in coal production, achieving a 7.8% growth in the fourth quarter of FY 2023-24 with production reaching 241.75 million tonnes. This performance underpins CIL's financial results, where net income rose to INR 374,022.9 million for the fiscal year ending March 2024, up from INR 317,632.3 million the previous year. Despite this strong financial performance and a dividend recommendation of INR 5 per share for FY23-24, concerns linger about the sustainability of these dividends due to a high cash payout ratio (1226%), indicating that dividend payments are not well covered by cash flows from operations.
Overview: Petronet LNG Limited operates in India, focusing on the import, storage, regasification, and supply of liquefied natural gas (LNG), with a market capitalization of approximately ₹470.25 billion.
Operations: Petronet LNG Limited generates ₹52.81 billion from its natural gas business.
Dividend Yield: 3.2%
Petronet LNG displays a mixed dividend profile. While its dividends are covered by both earnings and cash flows, with payout ratios standing at 12.8% and 51.4% respectively, the company's dividend history has been marked by inconsistency, showing volatility over the past decade. Despite this, dividends have grown in that period, and its current yield of 3.19% ranks in the top quartile of Indian stocks. Recent board changes could influence future strategy; Shri Raian Nogi Karanjawala joined as an Independent Director on May 16, 2024, bringing extensive legal and strategic expertise to the table.
Overview: PTC India Limited operates in the trading of power across India, Nepal, Bhutan, and Bangladesh, with a market capitalization of approximately ₹67.30 billion.
Operations: PTC India Limited generates revenue primarily through its power trading segment, which contributed ₹163.77 billion, and its financing business, which added ₹7.85 billion.
Dividend Yield: 3.4%
PTC India offers a dividend yield of 3.43%, placing it in the top 25% of Indian dividend payers. Despite its reasonable earnings coverage with a payout ratio of 51.8%, the company's dividend history has been marked by instability, with volatile payments over the past decade. However, dividends are well-supported by cash flows, evidenced by a low cash payout ratio of 7.7%. Trading at a P/E ratio of 13.3x, PTC is valued below the broader Indian market average of 31.8x. Recent executive changes include appointing Mr. Rajiv Kumar Rohilla as Non-Executive Nominee Director during the EGM on March 28, 2024.
Take a closer look at our Top Dividend Stocks list of 22 companies by clicking here.
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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.
Companies discussed in this article include NSEI:COALINDIA NSEI:PETRONET and NSEI:PTC.
