Indian Dividend Stocks: Canara Bank And 2 Other Top Picks

Over the last 7 days, the Indian market has dropped 1.0%, but it has risen by 39% over the past year with earnings forecasted to grow by 17% annually. In this context, selecting dividend stocks like Canara Bank can provide stability and income potential amidst fluctuating market conditions.

Top 10 Dividend Stocks In India

Name	Dividend Yield	Dividend Rating
Castrol India (BSE:500870)	3.03%	★★★★★★
Balmer Lawrie Investments (BSE:532485)	3.89%	★★★★★★
D. B (NSEI:DBCORP)	5.17%	★★★★★☆
Indian Oil (NSEI:IOC)	7.93%	★★★★★☆
Bharat Petroleum (NSEI:BPCL)	5.96%	★★★★★☆
Balmer Lawrie (BSE:523319)	3.07%	★★★★★☆
Redington (NSEI:REDINGTON)	3.12%	★★★★★☆
Canara Bank (NSEI:CANBK)	3.11%	★★★★★☆
Bank of Baroda (NSEI:BANKBARODA)	3.22%	★★★★★☆
PTC India (NSEI:PTC)	3.62%	★★★★★☆

Click here to see the full list of 17 stocks from our Top Indian Dividend Stocks screener.

We'll examine a selection from our screener results.

Canara Bank (NSEI:CANBK)

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

Overview: Canara Bank offers a range of banking products and services both in India and internationally, with a market cap of ₹937.72 billion.

Operations: Canara Bank's revenue segments include Treasury Operations (₹255.75 billion), Life Insurance Operation (₹120.19 billion), Wholesale Banking Operations (₹430.48 billion), Retail Banking Operations - Digital Banking (₹22.30 million), and Other Retail Banking Operations (₹632.28 billion).

Dividend Yield: 3.1%

Canara Bank's recent dividend announcement of ₹3.22 per share underscores its commitment to returning value to shareholders, supported by a low payout ratio of 19.1%, indicating strong earnings coverage. Despite the bank's high level of non-performing loans (4.3%), its dividends remain sustainable and forecasted to be well-covered in three years with a 16.5% payout ratio. However, past dividend payments have been volatile, raising concerns about long-term reliability for income-focused investors.

• Navigate through the intricacies of Canara Bank with our comprehensive dividend report here.
• The analysis detailed in our Canara Bank valuation report hints at an deflated share price compared to its estimated value.

Indian Oil (NSEI:IOC)

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

Overview: Indian Oil Corporation Limited, with a market cap of ₹2.43 trillion, refines, pipeline transports, and markets petroleum products both in India and internationally through its subsidiaries.

Operations: Indian Oil Corporation Limited generates revenue primarily from petroleum products (₹8.25 trillion) and petrochemicals (₹262.95 billion).

Dividend Yield: 7.9%

Indian Oil Corporation Limited's recent dividend increase to ₹7 per share highlights its commitment to shareholder returns, supported by a payout ratio of 39.6%. Despite a volatile dividend history and declining earnings forecast, the dividends are well-covered by both earnings and cash flows. The company's price-to-earnings ratio of 7.9x suggests good value compared to the Indian market average of 34.5x, though high debt levels remain a concern for long-term sustainability.

• Delve into the full analysis dividend report here for a deeper understanding of Indian Oil.
• Upon reviewing our latest valuation report, Indian Oil's share price might be too pessimistic.

PTC India (NSEI:PTC)

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

Overview: PTC India Limited, with a market cap of ₹63.75 billion, engages in the trading of power across India, Nepal, Bhutan, and Bangladesh through its subsidiaries.

Operations: PTC India Limited generates revenue primarily from its power trading segment, which accounts for ₹159.67 billion, and its financing business, which contributes ₹7.35 billion.

Dividend Yield: 3.6%

PTC India’s dividend payments are well-covered by both earnings (54% payout ratio) and cash flows (9.4% cash payout ratio). Despite a volatile dividend history, its current yield of 3.62% places it in the top 25% of Indian dividend payers. The company’s recent earnings report showed an increase in net income to ₹1.74 billion for Q1 2024, indicating stable financial performance amidst management changes and regulatory challenges.

• Unlock comprehensive insights into our analysis of PTC India stock in this dividend report.
• The analysis detailed in our PTC India valuation report hints at an inflated share price compared to its estimated value.

Make It Happen

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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.

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