Indian Dividend Stocks Featuring Oil and Natural Gas Plus Two More

In the current landscape, Indian investors are keeping a close eye on the potential impacts of the upcoming US elections, as changes in US policies could influence trade dynamics and economic growth in India. Amidst this backdrop, dividend stocks offer a compelling option for investors seeking stable returns, particularly those from sectors like oil and natural gas that can provide resilience against market fluctuations.

Top 10 Dividend Stocks In India

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

Below we spotlight a couple of our favorites from our exclusive screener.

Oil and Natural Gas

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

Overview: Oil and Natural Gas Corporation Limited, along with its subsidiaries, is involved in the exploration, development, and production of crude oil and natural gas both within India and internationally, with a market cap of ₹3.41 trillion.

Operations: Oil and Natural Gas Corporation Limited generates revenue primarily from its operations in India, with ₹5.72 billion from Refining & Marketing, ₹441.92 million from Onshore Exploration and Production (E&P), and ₹953.81 million from Offshore E&P, alongside international activities contributing ₹96.69 million.

Dividend Yield: 4.5%

Oil and Natural Gas Corporation (ONGC) offers a compelling dividend profile with its dividends well-covered by earnings and cash flows, maintaining payout ratios around 31.3% and 32.5%, respectively. Despite a volatile dividend history over the past decade, recent increases in payments are notable. ONGC’s dividend yield ranks in the top 25% of Indian market payers, supported by a low price-to-earnings ratio of 7.7x compared to the market average of 32.7x, enhancing its value proposition for investors seeking income stability amidst ongoing strategic expansions like potential acquisitions in renewable energy sectors.

• Navigate through the intricacies of Oil and Natural Gas with our comprehensive dividend report here.

• In light of our recent valuation report, it seems possible that Oil and Natural Gas is trading beyond its estimated value.

Swaraj Engines

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

Overview: Swaraj Engines Limited manufactures and sells diesel engines, diesel engine components, and spare parts for tractors in India, with a market cap of ₹36.41 billion.

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

Dividend Yield: 3.2%

Swaraj Engines exhibits a mixed dividend profile, with its current payout ratio of 83.7% indicating coverage by earnings, though cash flows fall short. Despite a top-tier yield of 3.17% in the Indian market, dividends have been volatile over the past decade. Recent earnings growth and favorable valuation metrics like a price-to-earnings ratio of 24.6x suggest potential value; however, sustainability concerns persist due to high non-cash earnings and inconsistent dividend history.

• Click here to discover the nuances of Swaraj Engines with our detailed analytical dividend report.

• In light of our recent valuation report, it seems possible that Swaraj Engines is trading behind its estimated value.

Union Bank of India

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

Overview: Union Bank of India offers a range of banking products and services, with a market cap of ₹834.73 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, and Retail Banking Operations – Other Retail Banking Operations at ₹407.01 billion.

Dividend Yield: 3.3%

Union Bank of India offers a compelling dividend profile, with its dividends currently covered by earnings at an 18.8% payout ratio and forecasted to remain sustainable in three years. Despite trading at a good value compared to peers and industry, the bank’s dividend history has been unstable over the past decade. Recent earnings growth is notable, with Q2 net income reaching ₹47.51 billion from ₹35.72 billion last year, yet high non-performing loans at 4.5% pose potential risks.

• Click to explore a detailed breakdown of our findings in Union Bank of India’s dividend report.

• Our valuation report here indicates Union Bank of India may be undervalued.

Make It Happen

• Gain an insight into the universe of 18 Top Indian Dividend Stocks by clicking here.

• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St’s portfolio to get a 360-degree view on how they’re shaping up.

• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

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.

Companies discussed in this article include NSEI:ONGC NSEI:SWARAJENG and NSEI:UNIONBANK.

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