As an Investors we recommend you to invest in companies that regularly declare dividends.
High-quality companies having strong balance sheet and pays consistent dividends is where investor wants to Invest. It is because consistent dividend paying companies have strong cash generation. The most critical metric to find out about the dividend of any company is to check their dividend yield.
I would like to share about 5 such companies which have consistently given very good dividends to their investors in the last 5 years. I have considered companies which are fundamentally strong and have a Market cap of more than ₹ 5000 crores, Debt to Equity Ratio of less than 1 and Net profit margin of more than 5%.
We have considered the average annual dividend yield of the last 5 years because many times it happens that a company may pay good dividend in the last 1 year and may not have that good track record of paying good dividends.
Hindustan Zinc Limited:
Hindustan Zinc has its excellent presence in integrated zinc, lead, and silver manufacturer. It is a subsidiary of Indian mining and metals Vedanta. The average dividend yield of Hindustan Zinc for last 5 years is 5.62%. The company has a 75% volume market share in the domestic zinc market as of date having agreement with GOI for mining rights and having net reserve of 448 million tonnes, allowing company to run its operations for more than 25 years.
Indus Towers:
It is the largest telecom tower company in India. This company builds, owns and maintains Telecom Towers. Indus tower for past 5 years have paid average dividend of 5.81%. As of March 2021, Indus Towers has 1.85 lakh and 3.35 lakh co-locations in 22 circles. With 5G network coming into picture in India it can get a larger market share in near future. The telecom tower industry is very capital intensive and Indus Towers will be able to keep on constructing new towers in the undersaturated areas to expand its coverage area.
Vedanta:
India’s largest privately owned metals and mining company involved in the exploration, production, and sale of minerals such as zinc, lead, silver, copper, aluminum, iron ore, and oil and gas. Vedanta has average dividend yield of 6.29% for last 5 years. It is India’s largest private crude oil producer with a 40% market share and also the largest aluminum producer. It operates in the zinc sector through its subsidiary Hindustan Zinc. In addition, they have a very diversified metal portfolio that includes other industrial metals such as copper, lead, and iron ore. The company has very good diversification from metal industry exposure.
Coal India:
Coal India is the considered largest coal-producing company in the world. It is a Maharatna PSU that holds an 82% market share in India’s coal production. Their products cater to Industries like cement, fertilizer, steel, power, and many other industrial sectors. Coal India is able to maintain average dividend yield of 7.98% for the last 5 years. The company’s greatest strength is its strategic importance to the Indian industrial sector and its monopoly position. Coal India holds 48% of India’s coal reserves and meets 83% of the domestic coal demand. Company is holding great strategic importance in India’s power, steel, cement, and many other important industrial sectors. Also, the company has given returns of -45% from its listing in 2010 to date.
Indian Oil Corporation:
Indian Oil is India’s largest oil and gas PSU. It is ranked 212 in the Global Fortune 500. The average dividend yield of Indian Oil for the last 5 years is 10.10%. Indian Oil has around 50% market share in the energy products space which includes petrol, diesel, aviation fuel, LPG, etc. Indian Oil plays important role for India’s energy needs. Apart from this, they have more than 32,000 petrol pumps in their network. This has yielded great profits for their business of non-fuel products including various lubricants and engine oils.
Above information is for educational purposes only, and do not recommend any kind of buy/sell.