3 Indian Dividend Stocks To Consider With At Least 3.1% Yield

The Indian market has experienced a 4.2% drop over the past week, yet it boasts an impressive 40% rise over the last year with earnings projected to grow by 18% annually. In such dynamic conditions, dividend stocks offering yields of at least 3.1% can provide a stable income stream while potentially benefiting from overall market growth.

Top 10 Dividend Stocks In India

Click here to see the full list of 18 stocks from our Top Indian Dividend Stocks screener.

Let's dive into some prime choices out of the screener.

Bank of Baroda (NSEI:BANKBARODA)

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

Overview: Bank of Baroda Limited offers a range of banking products and services to individuals, government departments, and corporate customers both in India and internationally, with a market cap of ₹1.27 trillion.

Operations: Bank of Baroda Limited's revenue segments include Treasury at ₹316.82 billion, Other Banking Operations at ₹110.76 billion, Corporate/Wholesale Banking at ₹502.78 billion, Retail Banking - Digital Banking at ₹7.40 million, and Other Retail Banking at ₹512.25 billion.

Dividend Yield: 3.1%

Bank of Baroda's dividend payments have been volatile over the past decade, though currently well-covered by earnings with a low payout ratio of 20.9%. Despite this volatility, dividends are forecasted to remain covered in the next three years. The bank trades at a good value compared to peers and has shown significant earnings growth recently. However, investors should note its high level of bad loans at 2.9%, which could impact future stability.

• Click here to discover the nuances of Bank of Baroda with our detailed analytical dividend report.
• Our valuation report here indicates Bank of Baroda may be undervalued.

Swaraj Engines (NSEI:SWARAJENG)

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

Overview: Swaraj Engines Limited manufactures and sells diesel engines, components, and spare parts for tractors in India, with a market cap of ₹36.01 billion.

Operations: Swaraj Engines Limited generates revenue of ₹15.13 billion from its diesel engines, components, and spare parts for tractors in India.

Dividend Yield: 3.2%

Swaraj Engines' dividend yield of 3.2% ranks in the top 25% among Indian stocks, yet its sustainability is questionable due to a high cash payout ratio of 107.3%, indicating dividends aren't well-covered by free cash flow. Despite volatile payments over the past decade, dividends have grown. The stock trades at a favorable price-to-earnings ratio of 24.4x compared to the market's 32.7x, and recent earnings growth has been robust with Q2 sales rising to ₹4.64 billion from ₹3.89 billion year-on-year.

• Dive into the specifics of Swaraj Engines here with our thorough dividend report.
• The analysis detailed in our Swaraj Engines valuation report hints at an deflated share price compared to its estimated value.

Union Bank of India (NSEI:UNIONBANK)

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

Overview: Union Bank of India offers a range of banking products and services, with a market cap of ₹841.76 billion.

Operations: Union Bank of India's revenue segments include Treasury Operations at ₹323.29 billion, Corporate/Wholesale Banking at ₹460.25 billion, Retail Banking Operations - Digital Banking Operations at ₹9.92 billion, Retail Banking Operations - Other Retail Banking Operations at ₹407.01 billion, and Other Banking Operations at ₹31.94 billion.

Dividend Yield: 3.3%

Union Bank of India's dividend yield of 3.26% places it among the top 25% in the Indian market, yet its track record over the past decade shows volatility and a decline in payments. Despite this, dividends are currently well-covered by earnings with an 18.8% payout ratio and projected to remain covered at 21%. Recent earnings growth is notable, with Q2 net income rising to ₹47.51 billion from ₹35.72 billion year-on-year, reflecting strong financial performance despite regulatory challenges.

• Get an in-depth perspective on Union Bank of India's performance by reading our dividend report here.
• Our expertly prepared valuation report Union Bank of India implies its share price may be lower than expected.

Where To Now?

• Explore the 18 names from our Top Indian Dividend Stocks screener here.
• Hold shares in these firms? Setup your portfolio in Simply Wall St to seamlessly track your investments and receive personalized updates on your portfolio's performance.
• Join a community of smart investors by using Simply Wall St. It's free and delivers expert-level analysis on worldwide markets.

Want To Explore Some Alternatives?

• 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.

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