Hi, Investors generally prefer to invest in companies that frequently declare dividends to earn an extra income.
Investors target high-quality companies whose balance sheet is strong and pays dividends consistently.
It is because consistent dividend players have strong cash generation.
so they can pay dividends consistently to their shareholders.
So they can pay a majority portion of their surplus as dividends.
The most critical metric to find out about the dividend of any company is the dividend yield.
The annual dividend yield is calculated by dividing the total dividend per share paid by any company in a year divided by the company's share price.
It is a better metric to know how much dividend a company is paying.
So today we will tell you about 5 such companies which have consistently given very good dividends to their investors in the last 5 years.
In this list, we have considered only those companies which are fundamentally strong and have a Market cap of more than ₹ 5000 crores,
- Debt to Equity Ratio of less than 1, - 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 has paid a very good dividend in the last 1 year
but overall the company may not have that good record in terms of paying dividends.
We will cover the list in ascending order of 5-year average dividend yield i.e. the company which has the highest average dividend yield of the last 5 years will be covered at the end.
We have taken prices on the market close of 31st May 2022.
So let's start with today's list.
The first company is Hindustan Zinc Limited
Hindustan Zinc is India's only integrated zinc, lead, and silver manufacturer.
It is one of the world's lowest-cost zinc producers and also the second-largest zinc producer.
The company is a subsidiary of Indian mining and metals giant Vedanta.
The average dividend yield of Hindustan Zinc for the last 5 years is 5.62%.
The company has a 75% volume market share in the domestic zinc market as of date.
It has long-term agreements with the Government of India for mining rights and has a net reserve of 448 million tonnes, which allows the company to run its operations for more than 25 years.
The major weakness of the company is its excessive dependence on the steel sector.
The steel industry accounts for 70% of the domestic zinc market, leaving zinc producers such as Hindustan Zinc at risk of steel industry cyclicality and inherent risk.
As you can see on your screen, we have shown some key financial and technical ratios of the issuing company.
We have also included the prices of 2 technical indicators so that you can see the stocks from a technical perspective as well.
We have used 2 indicators- 200 days simple moving average i.e. 200 days SMA and RSI (14).
If a company's stock price is trading above the 200 DMA, the stock can be considered bullish.
And if the price is trading down than the 200 DMA then the stock can be said to be bearish.
As for the RSI, an RSI value above 30 is generally considered oversold, and a trend reversal is likely to lead to an uptrend.
Similarly, an RSI value above 70 is considered overbought, and a trend reversal is likely.
Out of 16 different analyst ratings, 50% of analysts have given a SELL call on the Hindustan Zinc stock.
These ratings are not buy-sell recommendations of any kind by Groww.
These ratings are derived by aggregating ratings given by different market analysts.
The second company on our list is Indus Towers.
Indus Towers, formerly known as Bharti Infratel E, is the largest telecom tower company in India.
This company builds, owns and maintains Telecom Towers.
The average dividend yield of Indus Towers for the last 5 years is 5.81%.
As of March 2021, Indus Towers has 1.85 lakh and 3.35 lakh co-locations in 22 circles.
Is the industry dominant? The establishment of a 5G network in India can get a bigger market share in the 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.
As you can see on your screen, we have shown some key financial and technical ratios of the issuing company.
Out of 23 different analyst ratings, 39% of analysts have given calls and 48% have given calls to Indus Towers stock.
The third company that we are going to talk about is Vedanta.
Vedanta is India's largest privately owned metals and mining company.
All of these are involved in the exploration, production, and sale of minerals such as zinc, lead, silver, copper, aluminum, iron ore, and oil and gas.
The average dividend yield of Vedanta for the last 5 years is 6.29%.
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 is also involved in the business of production of crude oil which has given good diversification from metal industry exposure.
A big weakness of Vedanta is the low confidence level in the promoters of the company.
In 2020, Vedanta's promoter Anil Agarwal wanted to delist the company.
But in the delisting, they had made a price offer of Rs 87.5 while the market price of the share at that time was running at Rs 140 per share.
This offer was rejected by the minority shareholders of the company and the image of the promoters of the company was badly damaged.
Apart from this, Vedanta's Sterlite Copper Plant had to be shut down due to a lot of protests over the paint which had badly affected the image of the company.
Now you can see some key financial and technical ratios of Vedanta on the screen.
Out of 14 different analyst ratings, Vedanta stock is given a call by 64% of analysts.
The fourth company is Coal India.
Coal India is the 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 are used in cement, fertilizer, steel, power, and many other industrial sectors.
The average dividend yield of Coal India for the last 5 years is 7.98%.
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.
Furthermore, this company holds great strategic importance for India's power, steel, cement, and many other important industrial sectors.
The major weakness of the company is its PSU status and exposure to socio-political and regulatory risks.
The internal structure is very bureaucratic and the mandates of the Government of India are always to be followed even when these mandates are detrimental to the shareholders.
Also, the company has given returns of -45% from its listing in 2010 to date.
As you can see on your screen, we have shown some key financial and technical ratios of the issuing company.
Out of 24 different analyst ratings, Coal India stock has a call by 79% of analysts.
The last company we will talk about is 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 IndianOil for the last 5 years is 10.10%.
IndianOil has around 50% market share in the energy products space which includes petrol, diesel, aviation fuel, LPG, etc.
Therefore, Indian Oil is strategically important 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.
The biggest weakness of the company is its PSU status and zero pricing power.
The company's fuel products such as petrol, diesel, LPG, kerosene, etc. do not have direct pricing power under the Government of India's pricing control.
Most of the LPG is subsidized in India and these subsidies are directly routed to IOCL from the government
which leads to considerable delays and puts stress on the company's working capital and balance sheet.
Now you can see some of the key Financial & Technical Ratios of IOCL on the screen.
Out of 32 different analyst ratings, IndianOil stock is given a call by 72% of analysts.
So these are 5 High-Quality High-Dividend Yield Companies of Today.
Tell us in the comments which of the companies are in your portfolio.
We remind you that these videos are for educational purposes only, and do not recommend any kind of buy/sell.
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