Examining 3 Indian Dividend Stocks With Yields Up To 6.6%

The Indian market has shown robust performance, with a 1.1% rise over the last week and an impressive 45% increase over the past year, alongside forecasts predicting annual earnings growth of 16%. In such a dynamic environment, dividend stocks that offer high yields can be particularly appealing to investors looking for both stability and income.

Top 10 Dividend Stocks In India

Name	Dividend Yield	Dividend Rating
Balmer Lawrie Investments (BSE:532485)	3.84%	★★★★★★
Gulf Oil Lubricants India (NSEI:GULFOILLUB)	3.29%	★★★★★☆
D. B (NSEI:DBCORP)	3.53%	★★★★★☆
HCL Technologies (NSEI:HCLTECH)	3.31%	★★★★★☆
Indian Oil (NSEI:IOC)	8.20%	★★★★★☆
Bharat Petroleum (NSEI:BPCL)	6.65%	★★★★★☆
VST Industries (BSE:509966)	3.59%	★★★★★☆
Oil and Natural Gas (NSEI:ONGC)	3.80%	★★★★★☆
PTC India (NSEI:PTC)	3.54%	★★★★★☆
Swaraj Engines (NSEI:SWARAJENG)	3.32%	★★★★☆☆

Click here to see the full list of 15 stocks from our Top Indian Dividend Stocks screener.

We'll examine a selection from our screener results.

Bharat Petroleum (NSEI:BPCL)

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

Overview: Bharat Petroleum Corporation Limited operates in India, focusing on refining crude oil and marketing petroleum products, with a market capitalization of approximately ₹1.37 trillion.

Operations: Bharat Petroleum Corporation Limited generates revenue primarily through its Downstream Petroleum segment, which accounted for ₹50.68 billion, and a smaller segment in Exploration & Production of Hydrocarbons, contributing ₹1.88 billion.

Dividend Yield: 6.6%

Bharat Petroleum Corporation Limited (BPCL) presents a complex picture for dividend investors. Despite a volatile dividend history over the past decade, recent trends show an improvement with dividends now better covered by earnings and cash flows, evidenced by payout ratios of 33.3% and 34.6%, respectively. BPCL trades at a favorable price-to-earnings ratio of 5.1x, below the Indian market average of 34x, suggesting good relative value. However, earnings are expected to decline significantly in the next three years, which could impact future dividend sustainability despite current coverage levels.

• Take a closer look at Bharat Petroleum's potential here in our dividend report.
• Our valuation report here indicates Bharat Petroleum may be undervalued.

Coal India (NSEI:COALINDIA)

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

Overview: Coal India Limited, along with its subsidiaries, engages in the production and marketing of coal and coal products across India, boasting a market capitalization of approximately ₹3.16 trillion.

Operations: Coal India Limited generates ₹1.30 billion in revenue primarily from its coal mining and services segment.

Dividend Yield: 5%

Coal India's dividend yield stands at 4.98%, ranking in the top 25% of Indian market payers, yet its sustainability is questionable with a cash payout ratio of 1226%, indicating dividends are not well covered by free cash flows. While dividends have increased over the past decade, they've also been marked by significant volatility and lack of reliable growth. Financially, Coal India's P/E ratio is attractively low at 8.4x compared to the broader Indian market's 34x, and recent operational results show a production increase to 189.3 million tonnes from April to June 2024, up from 175.5 million tonnes year-over-year, suggesting some operational momentum despite broader financial concerns regarding dividend payouts.

• Click to explore a detailed breakdown of our findings in Coal India's dividend report.
• Upon reviewing our latest valuation report, Coal India's share price might be too pessimistic.

Oil and Natural Gas (NSEI:ONGC)

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

Overview: Oil and Natural Gas Corporation Limited (ONGC) operates in exploration, development, and production of crude oil and natural gas both domestically in India and internationally, with a market capitalization of approximately ₹4.06 trillion.

Operations: Oil and Natural Gas Corporation Limited generates revenue primarily through refining and marketing (₹56.75 billion), onshore exploration and production (₹4.39 billion), and offshore exploration and production (₹9.43 billion) within India, along with international operations contributing ₹95.53 billion.

Dividend Yield: 3.8%

Oil and Natural Gas Corporation (ONGC) offers a dividend yield of 3.8%, placing it among the top 25% of Indian dividend payers. Despite this, its dividend history over the past decade has been marked by volatility, with payments not consistently growing or stable year-over-year. However, ONGC's dividends are sustainably covered by both earnings and cash flows, with a payout ratio of 31.3% and a cash payout ratio of 32.5%. Additionally, trading at a P/E ratio of 8.2x—well below the Indian market average—suggests relative undervaluation compared to peers.

• Click here and access our complete dividend analysis report to understand the dynamics of Oil and Natural Gas.
• Our valuation report unveils the possibility Oil and Natural Gas' shares may be trading at a discount.

Seize The Opportunity

• Click this link to deep-dive into the 15 companies within our Top Indian Dividend Stocks screener.
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Ready For A Different Approach?

• 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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