In recent times, the Indian market has shown promising growth, with a 1.2% rise over the last week and an impressive 48% increase over the past 12 months. With earnings forecasted to grow by 18% annually, identifying stocks with strong dividend yields becomes increasingly important for investors seeking stable returns in this vibrant market landscape.
Top 10 Dividend Stocks In India
Name
Dividend Yield
Dividend Rating
NMDC (BSE:526371)
3.57%
★★★★★☆
Castrol India (BSE:500870)
3.40%
★★★★★☆
Balmer Lawrie Investments (BSE:532485)
4.90%
★★★★★☆
VST Industries (BSE:509966)
4.17%
★★★★★☆
Swaraj Engines (NSEI:SWARAJENG)
3.78%
★★★★★☆
HCL Technologies (NSEI:HCLTECH)
3.36%
★★★★★☆
Gujarat Narmada Valley Fertilizers & Chemicals (NSEI:GNFC)
Overview: Castrol India Limited is a company that specializes in manufacturing and marketing automotive and industrial lubricants, both within India and globally, with a market capitalization of approximately ₹217.90 billion.
Operations: Castrol India Limited generates its revenue primarily through the sale of lubricants, amounting to ₹50.75 billion.
Dividend Yield: 3.4%
Castrol India has demonstrated a consistent dividend payout over the past decade, with an increase in dividend payments signaling reliability to investors. Despite a high cash payout ratio of 97.9%, indicating potential sustainability concerns, the company's dividends are covered by earnings with a payout ratio of 85.8%. Recent financial performance shows positive momentum, with Q4 sales and net income rising to INR 12,640.4 million and INR 2,419.4 million respectively from the previous year. The proposed final dividend of INR 4.50 per share for FY2023 underscores its commitment to rewarding shareholders amidst this growth trajectory.
Overview: NMDC Limited, along with its subsidiaries, is engaged in the exploration and production of iron ore in India, boasting a market capitalization of approximately ₹706.72 billion.
Operations: NMDC Limited generates revenue primarily through iron ore sales, amounting to ₹204.17 billion, supplemented by its pellet, other minerals, and services segment which contributes ₹2.51 billion.
Dividend Yield: 3.6%
NMDC Limited's recent declaration of an INR 5.75 interim dividend per share highlights its commitment to shareholder returns, despite a history of volatile dividends over the past decade. The company's financial performance has shown improvement, with Q3 sales and net income increasing significantly year-over-year to INR 54,099 million and INR 14,839.3 million respectively. With a payout ratio of 39.2% and a cash payout ratio of 43.4%, NMDC's dividends appear sustainable, supported by both earnings and cash flows, amidst a backdrop of growing profits which rose by 25% over the past year.
Overview: Petronet LNG Limited is a key player in India's energy sector, focusing on the import, storage, regasification, and supply of liquefied natural gas (LNG), with a market capitalization of approximately ₹453.75 billion.
Operations: Petronet LNG Limited generates its revenue primarily from the natural gas segment, amounting to approximately ₹528.10 billion.
Dividend Yield: 3.3%
Petronet LNG's recent long-term LNG Sale & Purchase Agreement with QatarEnergy, ensuring energy security for India, contrasts with its unstable dividend track record and unreliable payments over the past decade. Despite a low payout ratio of 12.8% indicating dividends are well-covered by earnings, and a cash payout ratio of 51.4% suggesting cash flow sufficiency, the company's dividends have been volatile with significant annual drops. However, Petronet stands out in the Indian market with its price-to-earnings ratio at 12.9x being below average and a top-tier dividend yield of 3.31%, reflecting potential value for dividend-focused investors despite past inconsistencies in payouts.
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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.
