Yahoo Finance

The Indian market has shown impressive momentum, rising 3.4% in the last 7 days and achieving a remarkable 44% increase over the past year, with all sectors gaining ground. In this robust environment, selecting dividend stocks with strong earnings growth potential can be a prudent strategy for investors seeking steady income and capital appreciation.

Top 10 Dividend Stocks In India

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

Let's take a closer look at a couple of our picks from the screened companies.

Bharat Petroleum

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

Overview: Bharat Petroleum Corporation Limited primarily engages in refining crude oil and marketing petroleum products in India and internationally, with a market cap of ₹1.52 trillion.

Operations: Bharat Petroleum Corporation Limited generates revenue from its Downstream Petroleum segment, amounting to ₹5.07 billion, and from Exploration & Production of Hydrocarbons, which contributes ₹1.92 billion.

Dividend Yield: 6%

Bharat Petroleum's recent earnings report showed a decline in net income to ₹28.42 billion from ₹106.44 billion year-over-year, though sales remained steady at ₹1.13 trillion. The company declared a cash dividend of ₹10.5 per share, with dividends well-covered by both earnings and cash flows (payout ratios of 33.3% and 34.6%, respectively). However, its dividend history has been volatile despite some growth over the past decade, indicating an unstable track record for investors seeking consistent returns.

• Click here to discover the nuances of Bharat Petroleum with our detailed analytical dividend report.

• Our valuation report here indicates Bharat Petroleum may be undervalued.

Coal India

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

Overview: Coal India Limited, along with its subsidiaries, is involved in the production and marketing of coal and coal products in India and has a market cap of ₹3.26 trillion.

Operations: Coal India Limited generates revenue primarily from coal mining and services, amounting to ₹1.35 trillion.

Dividend Yield: 4.8%

Coal India Limited's dividend yield of 4.82% is among the top 25% in the Indian market. However, its cash payout ratio of 1226% indicates dividends are not well covered by free cash flows, though a low earnings payout ratio (42%) suggests coverage by earnings. Recent strategic moves include a joint venture with GAIL for a Coal to Synthetic Natural Gas plant and steady production growth, but its dividend history has been volatile over the past decade.

• Navigate through the intricacies of Coal India with our comprehensive dividend report here.

• Our expertly prepared valuation report Coal India implies its share price may be lower than expected.

Indian Oil

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

Overview: Indian Oil Corporation Limited, along with its subsidiaries, engages in refining, pipeline transportation, and marketing of petroleum products both in India and internationally, with a market cap of ₹2.39 trillion.

Operations: Indian Oil Corporation Limited generates revenue primarily from Petroleum Products (₹8.25 billion) and Petrochemicals (₹262.95 million), along with Other Business Activities (₹429.42 million).

Dividend Yield: 8.1%

Indian Oil Corporation Limited recently declared a final dividend of ₹7 per equity share for 2023-24. Despite a significant drop in Q1 net income to ₹35.28 billion from ₹144.37 billion year-on-year, its dividends remain covered by earnings (payout ratio: 39.6%) and cash flows (cash payout ratio: 56.8%). While the company's dividend has increased over the past decade, it has been volatile, making its reliability questionable despite being among the top dividend payers in India.

• Take a closer look at Indian Oil's potential here in our dividend report.

• According our valuation report, there's an indication that Indian Oil's share price might be on the cheaper side.

Make It Happen

• Get an in-depth perspective on all 16 Top Indian Dividend Stocks by using our screener here.

• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.

• Invest smarter with the free Simply Wall St app providing detailed insights into every stock market around the globe.

Curious About Other Options?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.

• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

• Find companies with promising cash flow potential yet trading below their fair value.

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:BPCL NSEI:COALINDIA and NSEI:IOC.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com