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The Indian market is up 2.5% in the last 7 days, with all sectors gaining ground, and has climbed 45% over the last year. In this bullish environment, identifying strong dividend stocks can provide both income and potential for capital appreciation as earnings are expected to grow by 16% per annum over the next few years.

Top 10 Dividend Stocks In India

Click here to see the full list of 14 stocks from our Top Indian Dividend Stocks screener.

We're going to check out a few of the best picks from our screener tool.

Bharat Petroleum

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

Overview: Bharat Petroleum Corporation Limited refines crude oil and markets petroleum products in India, with a market cap of ₹1.51 trillion.

Operations: Bharat Petroleum Corporation Limited generates revenue primarily from its Downstream Petroleum segment (₹5.07 billion) and Exploration & Production of Hydrocarbons segment (₹1.92 million).

Dividend Yield: 6%

Bharat Petroleum Corporation Limited (BPCL) has shown consistent dividend growth over the past decade, with a current yield in the top 25% of Indian market payers. Despite a volatile dividend track record, BPCL's payouts are well-covered by earnings and cash flows, maintaining low payout ratios of 33.3% and 34.6%, respectively. However, recent financial results indicate a significant drop in net income for Q1 2024 to ₹28.42 billion from ₹106.44 billion last year, highlighting potential challenges ahead for sustainability and growth prospects in dividends amidst declining earnings forecasts.

• Dive into the specifics of Bharat Petroleum here with our thorough dividend report.

• Our comprehensive valuation report raises the possibility that Bharat Petroleum is priced lower than what may be justified by its financials.

Coal India

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

Overview: Coal India Limited, along with its subsidiaries, produces and markets coal and coal products in India, with a market cap of ₹3.20 trillion.

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

Dividend Yield: 4.9%

Coal India offers a high dividend yield of 4.91%, placing it in the top 25% of Indian market payers, with dividends covered by earnings but not free cash flows due to a high cash payout ratio. Despite recent earnings growth and good value trading, its dividend history has been volatile over the past decade. Recent developments include increased coal production and a new composite mining license, potentially impacting future financial stability.

• Delve into the full analysis dividend report here for a deeper understanding of Coal India.

• Our valuation report here indicates Coal India may be undervalued.

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 ₹2.52 trillion.

Operations: Indian Oil Corporation Limited generates revenue primarily from petroleum products (₹8.33 trillion) and petrochemicals (₹262.34 billion).

Dividend Yield: 7.7%

Indian Oil Corporation reported a significant drop in net income for Q1 2024, from INR 144.37 billion to INR 35.28 billion year-over-year, with diluted EPS falling to INR 2.56 from INR 10.48. Despite earnings volatility and high debt levels, the company maintains a reasonable dividend payout ratio of around 40%, supported by cash flows at approximately 57%. Recent strategic alliances and board changes may influence future stability and dividend sustainability.

• Navigate through the intricacies of Indian Oil with our comprehensive dividend report here.

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

Turning Ideas Into Actions

• Navigate through the entire inventory of 14 Top Indian Dividend Stocks here.

• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.

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

Ready To Venture Into Other Investment Styles?

• 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.

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