Dividend Stocks to Buy in 2024

Best Dividend Stocks to Buy in 2024 : SMC Global Securities

Dividends have traditionally attracted new investors, primarily when the stock market was less technologically advanced. Dividends were once an essential factor for novice investors. However, as technology and data analytics progressed, investors’ priorities shifted. Many Indian investors are seeking top dividend-paying stocks to ensure profitable returns.

What are Dividend Stocks?

Dividend stocks are publicly listed corporations that distribute a percentage of their income to shareholders in the form of cash equivalents, cash or additional shares. These companies provide a consistent return on investment since they are well-established and have a track record of paying regular dividends to shareholders.

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Top 10 Dividend Stocks to Invest in 2024

Here is a compilation of the most promising dividend stocks to invest in 2024.

  1. Vedanta Ltd.

  2. Coal India Ltd.

  3. Power Finance Corporation Ltd.

  4. Hindustan Zinc Ltd.

  5. NTPC Ltd.

  6. HCL Technologies Ltd.

  7. Hindustan Unilever Ltd.

  8. Hinduja Global Solutions Ltd.

  9. NMDC Ltd.

  10. Embassy Office Parks REIT Ltd.

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Overview of Best Dividend Stocks to Invest in India

Vedanta Ltd.

Vedanta Limited is one of the world’s largest natural resource companies, having significant stakes in zinc-lead-silver, aluminium, iron ore, steel, oil and gas, copper, power, nickel, oil and gas, semiconductor, and glass. Over the last three years, the company has grown its sales by 23.83% while maintaining a respectable ROE of 24.81%.

Coal India Ltd.

Coal India Limited (CIL) is a government-owned coal mining corporation. The company’s range of goods includes coking coal, coal fines, semi-coking coal, hard coal, non-coking coal, washed and beneficiated coal, heavy oil, and coke. Its stock offers a healthy dividend yield of 4.95% and the company is almost debt-free.

Power Finance Corporation Ltd.

Power Finance Corporation Ltd. is a prominent Indian financial institution offering fund-based financial policies and products, such as credit facilities for power purchases, asset acquisition, buyer’s line of credit, short-term, corporate, bridge, and rupee and foreign currency term loans. Compared to the sector P/E of 17.52, the company’s TTM P/E ratio is 6.52.

Hindustan Zinc Ltd.

Hindustan Zinc ranks third in the world’s silver production rankings and is the second-largest integrated zinc producer globally. With an incredible 146% YTD returns, the corporation is currently the best-performing metal stock in 2024.

NTPC Ltd.

NTPC, India’s largest power supplier, aims to become the country’s largest integrated power business by 2032, with a capacity of 130 GW. With a return on equity of 13.5%, the company offers an attractive dividend yield of 39.5%. NTPC’s financials demonstrate steady expansion and stability.

HCL Technologies Ltd.

HCL Technologies Ltd. is a significant player in IT services, technical solutions, and business-related offerings. The company is expected to grow earnings and sales by 9.2% and 6.9% annually. EPS is predicted to increase by 8.6% annually, and return on equity is expected to increase by 27.8% in three years.

Hindustan Unilever Ltd.

One of India’s biggest FMCG (fast-moving consumer goods) companies, Hindustan Unilever Ltd., has best-in-class ESG ratings. The company has regularly distributed dividends for the past five years and has a strong dividend track record. The date of the following Unilever dividend announcement is July 25, 2024.

Hinduja Global Solutions Ltd.

Hinduja Global Solutions Ltd provides services to the following industries: banking, consumer electronics and technology, telecommunications, consumer packaged goods, retail, healthcare, insurance, hotel, travel, and media. With a payout ratio of 29.45%, the company offers a dividend yield of 1.23%.

NMDC Ltd.

With its registered headquarters in Hyderabad, Telangana, NMDC Ltd. owns and operates highly mechanised iron ore mines in Chhattisgarh and Karnataka. NMDC is regarded as one of the world’s most inexpensive iron ore producers. Additionally, it runs Panna, Madhya Pradesh’s only mechanised diamond mine in the country.

Embassy Office Parks REIT Ltd.

In India, Embassy Office Parks REIT owns, operates, and invests in real estate and related assets that generate rental revenue. It is the largest official REIT in Asia by area and the very first publicly listed REIT in India. The corporation issued a dividend of ₹5.22 for the quarter ending March 2024, which translates to a dividend yield of 7.90%.

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Latest Performance of Top 10 Dividend Stocks

Company Name Mar Cap.

(Cr).

ROCE % CMP  Debt / Eq

%

ROE % P/E Div Yld %
Vedanta Ltd. ₹ 1,68,761  23.4 ₹ 441 2.37 10.42 39.82 6.69
Coal India Ltd. ₹ 2,97,380 65.1 ₹ 482 0.08 53.4 7.96 5.03 
Power Finance Corporation Ltd. ₹ 1,65,202 9.85 ₹ 500 8.52 21.3 8.36 2.20 
Hindustan Zinc Ltd.  ₹ 2,81,637 46.3 ₹ 666 0.57 55.3 36.2 1.95
NTPC Ltd. ₹ 3,48,789 10.4 ₹ 360 1.48 13.5 16.8 2.02
HCL Technologies Ltd. ₹ 3,61,633  29.8  ₹ 1,332 0.08 23.5 23.0 3.90
Hindustan Unilever Ltd.  ₹ 5,52,716  27.2 ₹ 2,351 0.03 20.2 53.8 1.79
Hinduja Global Solutions Ltd.  ₹3,764 2.29 ₹ 809.45 0.23 3.00 56.9 1.85 
NMDC Ltd. ₹ 73,118 31.9 ₹ 249 0.13 23.9 12.7 2.65
Embassy Office Parks REIT Ltd. ₹ 32,880 5.41 ₹ 347 0.73 3.94  35.0 6.14

Overview of the Dividend Stocks in Indian Market

In the Indian market, dividend stocks continue to be a popular choice for investors hoping for long-term growth and consistent income. It may be worthwhile to keep an eye on dividend-paying stocks that have the potential to increase in value in addition to regular returns, especially in light of the encouraging sentiment now present in the Indian stock market, along with solid global cues.

Advantages and Risks Associated with Investing in Dividend Stocks

Investing in dividend stocks has various benefits, including a consistent source of passive revenue, lower market volatility, and the possibility for value gain. Dividend stocks generate continuous income that may be reinvested to increase profits.

However, dividend investing has risks such as dividend reduction, market swings, and lesser returns when compared to growth stocks.

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Why Should You Invest in Dividend Stocks in India?

Investment in dividend stocks in India provides a consistent flow of income with the opportunity for capital appreciation. Dividend stocks generate a continuous income stream that may be reinvested to increase returns. They are less volatile and provide a buffer against inflation. Furthermore, large dividend companies offer a tax benefit and are less risky than other stocks.

How to Start Investing in Dividend Stocks?

SMC, your dedicated companion for navigating the complexities of the financial world, turns your investment journey into a rewarding experience in the dividend stocks sector.

Here are three easy steps to start investing in dividend stocks :

  1. Go to the official website of SMCtradeonline or simply download the app
  2. Open a free demat account
  3. Start investing

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Conclusion

Whether you are an aggressive or cautious investor, dividend stocks can provide reasonable long-term returns. Conducting your own research before engaging in high-dividend stock investments is always a good idea. This will assist them in ensuring that their investment capital is in the right place and generates consistent returns.

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