Best Dividend Stocks India 2018-19

 

A dividend is a recurring income which shows up in your account periodically. If your retirement portfolio is going to have good exposure in equities, then consideration of best dividend stocks turns out to be very important.

We worked out a few best dividend stocks based on multiple factors.

Factors in consideration:

  1. Stability of the company
  2. Free Cash Flow
  3. Fundamental Growth
  4. Dividend Yield

We avoided companies:

  1. Companies with high debt or growing debt
  2. Companies with an inconsistent dividend payout

So here is the countdown:

*Dividend Yield, Dividend Payout

5. Ashok Leyland:

  • Sector: Commercial vehicle
  • Industry: Automobile
  • In these stocks, Ashok Leyland is one of the most disciplined companies in the market.
  • The company is having compounded profit growth of 27.05% for 10 years, 56.73% for 5 years and 82.44% for 3 years.

Dividend Record:

Profit Growth: Rank 1; Cash Flow: Rank 3; Dividend Yield Rank: 3; Dividend Payout Rank: 5

So Overall Rank of Dividend Scale: 5

Why you should buy it?

  • If you need the best fundamental growth with the dividend.
  • The company is on a growth spree. So more the company grows, more is the value of company stock. Therefore more is the value of the dividend.
Compounded Profit Growth
10 Years:27.05%
5 Years:56.73%
3 Years:82.44%

Why you should not buy?

  • Automobile sector depends on various metals and materials for business. These raw material are prone to market fluctuation.
  • Also, the automobile sector is going through an evolution to electric vehicles. We know the company is going to be ready to adapt. But it’s up to you want to participate.

4. ITC:

  • Sector: Cigarettes
  • Industry: FMCG
  • We find ITC as the hungry to grow the company. You name any FMCG vertical, you will find this company presence there.
  • We find the company is decreasing its debt and as per the trend it would be debt free soon.
  • Operational Cash flow growth is healthy at least 10 %.

Dividend Record:

Profit Growth: Rank 3; Cash Flow: Rank 3; Dividend Yield Rank: 3; Dividend Payout Rank: 4

So Overall Rank of Dividend Scale: 4

Why you should buy it?

  • FMCG as a sector is a less vulnerable sector to invest.
  • The company has good dividend payout of 56%
Compounded Profit Growth
10 Years:14.24%
5 Years:8.15%
3 Years:5.22%

Why you should not buy?

  • Promoter holding is zero

3. Colgate:

  • Sector: Personal products
  • Industry: FMCG
  • The company is virtually debt free

Dividend Record:

Profit Growth: Rank 5; Cash Flow: Rank 5; Dividend Yield Rank: 3; Dividend Payout Rank: 2

So Overall Rank of Dividend Scale: 3

Why you should buy it?

  • Same Reasons as ITC.
Compounded Profit Growth
10 Years:10.13%
5 Years:6.46%
3 Years:6.79%

Why you should not buy?

  • Competition in this market is high. Also market is prone to disruption.

2. Infosys:

  • Sector: IT Consulting & Software
  • Industry: IT
  • Company is virtually debt free.

Dividend Record:

Profit Growth: Rank 2; Cash Flow:Rank 1; Dividend Yield Rank:2 ; Dividend Payout Rank: 3

So Overall Rank of Dividend Scale: 2

Why you should buy it?

  • IT industry is a great margin business and a great growth industry.
  • Company has good dividend payout of 59%
Compounded Profit Growth
10 Years:11.25%
5 Years:10.65%
3 Years:8.15%

Why you should not buy?

  • Dollar plays a factor in this sector, but effects are minimal.

1. Care rating:

  • Sector : Miscellaneous
  • Company is listed in 2013, so it is an opportunity stock as well.

Dividend Record:

Profit Growth: Rank 3; Cash Flow:Rank 5; Dividend Yield Rank:1 ; Dividend Payout Rank: 1

So Overall Rank of Dividend Scale: 1

Why you should buy it?

  • It is a asset light business.
  • Company has a good return on equity (ROE) track record: 3 Years ROE 30.04%

Compounded Profit Growth:

5 Years:9.02%
3 Years:11.91%

Why you should not buy?

  • It is not a high growth Industry

Verdict:

In my opinion, If you are interested in financial freedom, then investing in dividend stocks in your portfolio would be a great first step to start with. But keep in mind, when you invest in dividend stocks your perspective should be long-term i.e. you buy these stocks whenever prices are beaten down. So after 10 -20 years you would be holding a big chunk of stocks, which will provide dual benefits: Stock price appreciation and Dividend income.

Happy Investing.

Source: Screener.in and Moneycontrol.com

Experience of 8 years in stock investment. I learned everything by making a lot of mistakes and losing a good amount of money, I am here to make sure you don’t lose on either: Hope or Money.

2 thoughts on “Best Dividend Stocks India 2018-19

  1. Why dont you look at oil companies… They are trailing at healthy valuation and look at ioc dividend yield is close to 13% and cash flow is also good……

    1. Hi Harry,
      We looked into oil companies. Personally, I was impressed by their dividend payout as well as yield. And while we were preparing the list, in fact, Bpcl and Iocl both were in top ten. But oil companies are affected by currency fluctuation and crude oil, which are not in control of the companies. Therefore personally, I won’t invest in them. And I can not suggest my readers to invest in something I won’t.
      Thanks for your comment, time and attention. Stay in touch.
      Anurag

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