3 Indian Dividend Stocks Yielding Up To 4.2%

Over the last 7 days, the Indian market has risen 1.8%, driven by gains of 2.2% in the Financials sector, and is up 46% over the last 12 months. With earnings forecast to grow by 17% annually, investors are increasingly looking at dividend stocks that offer reliable income and potential for capital appreciation.

Top 10 Dividend Stocks In India

Name	Dividend Yield	Dividend Rating
Castrol India (BSE:500870)	3.01%	★★★★★★
Balmer Lawrie Investments (BSE:532485)	4.05%	★★★★★★
D. B (NSEI:DBCORP)	5.01%	★★★★★☆
HCL Technologies (NSEI:HCLTECH)	3.12%	★★★★★☆
VST Industries (BSE:509966)	3.24%	★★★★★☆
Indian Oil (NSEI:IOC)	8.09%	★★★★★☆
NMDC (BSE:526371)	3.27%	★★★★★☆
Balmer Lawrie (BSE:523319)	3.10%	★★★★★☆
Bank of Baroda (NSEI:BANKBARODA)	3.01%	★★★★★☆
PTC India (NSEI:PTC)	3.82%	★★★★★☆

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

Here we highlight a subset of our preferred stocks from the screener.

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 ₹38.18 billion.

Operations: Swaraj Engines Limited generates ₹14.37 billion in revenue from its diesel engines, components, and spare parts for tractors in India.

Dividend Yield: 3%

Swaraj Engines has shown consistent earnings growth of 15.6% annually over the past five years and is forecasted to grow at 13.65% per year. While trading at a relatively good value with a P/E ratio of 27.2x, its dividend yield stands at 3.02%, placing it in the top quartile among Indian dividend payers. However, its dividends are not well covered by free cash flows and have been volatile over the past decade, raising concerns about sustainability despite recent increases in payouts.

• Dive into the specifics of Swaraj Engines here with our thorough dividend report.
• Our comprehensive valuation report raises the possibility that Swaraj Engines is priced lower than what may be justified by its financials.

Ujjivan Small Finance Bank (NSEI:UJJIVANSFB)

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

Overview: Ujjivan Small Finance Bank Limited provides various banking and financial services in India with a market cap of ₹83.90 billion.

Operations: Ujjivan Small Finance Bank generates revenue from three primary segments: Treasury (₹7.58 billion), Retail Banking (₹58.71 billion), and Wholesale Banking (₹1.44 billion).

Dividend Yield: 3.5%

Ujjivan Small Finance Bank's dividend yield of 3.46% positions it among the top 25% of Indian dividend payers, supported by a low payout ratio of 22.6%, indicating strong coverage by earnings. However, its dividend history is short and volatile, with only two years of payments that have not grown consistently. Additionally, the bank's high level of bad loans (2.3%) raises concerns about long-term sustainability despite trading at a significant discount to its estimated fair value and showing good relative value compared to peers.

• Delve into the full analysis dividend report here for a deeper understanding of Ujjivan Small Finance Bank.
• The analysis detailed in our Ujjivan Small Finance Bank valuation report hints at an deflated share price compared to its estimated value.

Uniparts India (NSEI:UNIPARTS)

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

Overview: Uniparts India Limited, with a market cap of ₹21.71 billion, manufactures and sells engineering systems, solutions, assemblies, and components primarily for off-highway vehicles across India and internationally.

Operations: Uniparts India Limited generates revenue primarily from the sale of linkage parts and components for off-highway vehicles, amounting to ₹11.04 billion.

Dividend Yield: 4.2%

Uniparts India offers a dividend yield of 4.22%, placing it in the top 25% of Indian dividend payers, with dividends well-covered by both earnings (payout ratio: 73.8%) and cash flows (cash payout ratio: 55.9%). However, its dividend history is short and volatile, having only paid dividends for two years with recent decreases noted. Recent executive changes and declining financial performance may also impact future stability and growth prospects for dividends.

• Click here to discover the nuances of Uniparts India with our detailed analytical dividend report.
• Insights from our recent valuation report point to the potential undervaluation of Uniparts India shares in the market.

Next Steps

• Take a closer look at our Top Indian Dividend Stocks list of 18 companies by clicking 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.
• Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

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.

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