In the past year, the Indian stock market has experienced a robust growth of 43%, despite a recent dip of 1.3% over the last seven days. In this dynamic environment, dividend stocks like Swaraj Engines can appeal to investors looking for potential income combined with earnings growth prospects, which are anticipated to increase by 16% annually.
Overview: Swaraj Engines Limited, based in India, specializes in manufacturing and selling diesel engines, diesel engine components, and spare parts for tractors, with a market capitalization of approximately ₹35.50 billion.
Operations: Swaraj Engines Limited generates its revenue primarily from the sale of diesel engines, components, and spare parts, totaling ₹14.37 billion.
Dividend Yield: 3.3%
Swaraj Engines has shown robust growth with earnings increasing by 15.6% annually over the past five years, and a recent quarterly report indicating continued revenue and net income improvements. Despite its attractive price-to-earnings ratio of 25.3x, which is below the Indian market average, dividend sustainability is a concern due to a high cash payout ratio of 122% and volatile dividend history over the last decade. The company's recent penalty for GST violations is not expected to impact financials significantly.
Overview: Ujjivan Small Finance Bank Limited offers a range of banking and financial services across India, with a market capitalization of approximately ₹86.11 billion.
Operations: Ujjivan Small Finance Bank Limited generates revenue primarily through three segments: Treasury (₹7.15 billion), Retail Banking (₹56.18 billion), and Wholesale Banking (₹1.31 billion).
Dividend Yield: 3.4%
Ujjivan Small Finance Bank has recently increased its dividend to INR 1.50, reflecting a commitment to returning value to shareholders amidst robust earnings growth, with net income rising to INR 12.82 billion from INR 11 billion the previous year. However, the bank's dividend sustainability may be of concern given its relatively high bad loans ratio at 2.3%. Recent executive changes and the upcoming AGM suggest potential strategic shifts that could impact future performance and dividend policies.
Overview: Uniparts India Limited is a global manufacturer and supplier of engineering systems and components for off-highway vehicles, operating in regions including India, the US, Europe, Asia Pacific, and Japan, with a market capitalization of approximately ₹22.02 billion.
Operations: Uniparts India Limited generates revenue primarily through its linkage parts and components segment for off-highway vehicles, totaling ₹11.40 billion.
Dividend Yield: 4%
Uniparts India's dividend yield stands at 4.01%, ranking in the top quartile of Indian dividend stocks, supported by a payout ratio of 62.6% and a cash payout ratio of 53.9%. However, its recent financial performance shows a decline, with net income dropping to INR 1.25 billion from INR 2.05 billion year-over-year and sales also decreasing. This raises concerns about the sustainability of dividends despite current coverage by earnings and cash flows, especially as the company has only recently initiated dividend payments.
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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:SWARAJENG NSEI:UJJIVANSFB and NSEI:UNIPARTS.
