Best Large Cap Dividend Stocks: Large-cap stocks are often considered the best investment option for long-term investors and wealth builders who benefit from time. They provide better security, wealth creation, and market dominance over their sector, all green flags as to why they are the titans of their industry.
Combining the improved stability and capital appreciation of large-cap stocks, and the added benefit of dividends, we have compiled a list of the best large cap dividend stocks in India.
Best Large Cap Dividend Stocks In India
Let us take a look at the top five best large cap dividend stocks in India
Best Large Cap Dividend Stocks #1 – Vedanta
At the number one spot is Vedanta, a large-cap mining company. They have operations in the mining and extraction of nickel, aluminum, copper, power, steel iron ore, alloys, and oil and gas.
The company has mining operations in India, South Africa, Liberia, and Namibia. As mining operations are exploitative of the environment, the company has pledged $5 billion in its transition to net-zero operations over the next 10 years.
Financials Of Vedanta:
|CMP||₹ 281||Market Cap (Cr.)||₹ 1,08,486|
|EPS||₹ 28.4||Stock P/E||10.2|
|ROCE||23.8 %||ROE||20.4 %|
|Face Value||₹ 1.00||Book Value||₹ 106|
|Promoter Holding||68.1 %||Price to Book Value||2.73|
|D/E Ratio||1.69||Dividend Yield||34.8 %|
|Net Profit Margin||9.94 %||Operating Profit Margin||23.4 %|
Vedanta is a large-cap mining giant, with a market cap of over ₹1.08 lakh crore. For the financial year of 2023, Vedanta earned ₹1,47,308 crores in revenues and a net profit of ₹14,503 crores.
The company earned its highest revenues in FY 23, but profits have fallen due to higher expenses. The company has the highest dividend yields among large-cap companies, at a sky-high 34.8 percent.
The P/E of Vedanta is 10.2, versus its industry P/E of 9.4, indicating that the stock price is trading at a level close to its industry. Returns ratios show Vedanta is still going strong despite being a large-cap stock. ROE (20.4 percent) and ROCE (23.8 percent) are moderately high, which is a positive sign for investors.
The company’s D/E ratio is slightly high at 1.69, but the company’s revenues show it has the financial strength to reduce that figure in the future. Promoters of Vedanta own a 68 percent stake in the company, but their entire holding is pledged, which is a concerning factor given the company’s size and therefore, the value of the pledged stake.
Vedanta has given a lowly return of 17.5 percent in the past 5 years.
Best Large Cap Dividend Stocks #2 – Hindustan Zinc
HZL or Hindustan Zinc is the largest zinc producer in India and the 2nd largest integrated zinc producer worldwide. The company has an industry presence of over 50 years and has produced hundreds of millions of tonnes of zinc.
The company is a subsidiary of Vedanta, a mining group that has countrywide operations in India. HZL has mining facilities in 5 districts in Rajasthan – Udaipur, Chittorgarh, Bhilwara, Ajmer, and Rajsamand, besides one district in Uttarakhand.
Financials Of Hindustan Zinc
|CMP||₹ 305||Market Cap (Cr.)||₹ 1,28,978|
|EPS||₹ 24.9||Stock P/E||12.2|
|ROCE||50.5 %||ROE||44.6 %|
|Face Value||₹ 2.00||Book Value||₹ 30.6|
|Promoter Holding||64.9 %||Price to Book Value||9.95|
|D/E Ratio||0.92||Dividend Yield||24.7 %|
|Net Profit Margin||30.8 %||Operating Profit Margin||51.4 %|
HZL is a growing, zinc-producing company under the Vedanta group. In the financial year of 2023, HZL earned ₹34,098 crores in revenues and a ₹10,520 crores in net profits. The company has seen a growing pace in revenues and net profits over the years. In FY 22, HZL made ₹29,440 crores in sales and ₹9,630 crores in net profits.
Return ratios of HZL are quite high, and even higher than its parent company. ROCE is 50.5 percent and ROE is 44.6 percent, substantial figures compared to most of the stocks in the list. The stock P/E is 12.2, much lower than its industry P/E of 22.6.
The D/E ratio of HZL is 0.92, within the acceptable range. Hindustan Zinc has one of the best dividend yields among large-cap companies, at 24.8 percent. The promoters of HZL, Vedanta, own a 64.9 percent stake in the company and have pledged the whole stake. HZL shares have given a significantly low return of just 4.8 percent in the past 5 years.
Best Large Cap Dividend Stocks #3 – Coal India
Most of India’s electricity needs are met through the burning of coal and no company contributes to India’s coal needs like Coal India. The company was incorporated in 1973 as the Coal Mines Authority. Coal India is the biggest coal-producing company in the world. It has 84 mining areas in 8 states in India, and a total of 352 mines. CIL is one of the few companies under the government of India to achieve Maharatna status.
Financials Of Coal India:
|CMP||₹ 244||Market Cap (Cr.)||₹ 1,50,525|
|EPS||₹ 45.7||Stock P/E||5.35|
|ROCE||71.5 %||ROE||56.0 %|
|Face Value||₹ 10.0||Book Value||₹ 92.9|
|Promoter Holding||66.1 %||Price to Book Value||2.63|
|D/E Ratio||0.08||Dividend Yield||8.29 %|
|Net Profit Margin||20.3 %||Operating Profit Margin||26.6 %|
Coal India saw its best year in recent history earning ₹1,38,252 crores in revenues and ₹28,125 crores in net profits. The previous year (FY 22) saw the company earn ₹109,714 crores and a net profit of ₹17,378 crores.
But even as the company’s sales are climbing and are profitable, the 5-year sales growth of just 10.2 percent is quite slow. The P/E of the company (5.31) is almost half that of its industry (9.43). Coal India has a fairly high dividend yield among large-cap companies at 8.46 percent.
The company is almost debt free and has a low debt-to-equity ratio. The return ratios of Coal India are quite high at 56 percent for ROE and 71.5 percent for ROCE. The Government Of India is Coal India’s only promoter and holds 2/3rd or 66.1 percent stake in the company. Coal India has shed about (-18) percent of its share price from its market price 5 years ago.
Best Large Cap Dividend Stocks #4 – ONGC
To meet an entire country’s energy needs is not as simple as it looks on paper. To meet the natural oil and gas requirements of India, ONGC was created. The Maharatna company is the largest producer of oil and natural gas in India, with a 71 percent contribution to domestic production.
Their products are what flow to other oil companies such as BPCL, HPCL, and IOCL, which fill the fuel tanks of our diesel and petrol automobiles, and keep the fires of our kitchens burning.
Financials Of ONGC:
|CMP||₹ 159||Market Cap (Cr.)||₹ 1,99,964|
|EPS||₹ 28.2||Stock P/E||5.17|
|ROCE||14.7 %||ROE||14.3 %|
|Face Value||₹ 5.00||Book Value||₹ 223|
|Promoter Holding||58.9 %||Price to Book Value||0.71|
|D/E Ratio||0.51||Dividend Yield||6.77 %|
|Net Profit Margin||5.65 %||Operating Profit Margin||11.0 %|
ONGC is one of the largest government companies in India, with a market capitalization of ₹2.08 lakh crore. In FY 23, ONGC earned ₹6,84,829 crores in revenues, well above FY 22’s figures. Net profits for the same period were ₹32,778 crores, showing a drop in operating profit margins and net profits.
The large-cap energy company saw phenomenal performance in FY 22, earning ₹4,91,216 crores in revenues and ₹49,294 crores in net profits.
Given their profits and a high dividend yield of 6.77 percent, you can comprehend the size of the dividend payout from the company. ONGC has a moderate ROE (14.3 percent) and ROCE (14.7 percent). The D/E ratio of ONGC is well within the acceptable range at 0.51.
In 2022, the shareholding pattern of ONGC shows that the government of India has sold a small stake of 1.6 percent, bringing their total holding to 58.9 percent. 5-year return on ONGC shares is in red, with a slight fall of (-6.1) percent.
Best Large Cap Dividend Stocks #5 – Power Grid Corporation
Electricity is only as good as its accessibility to the people who need it. Power Grid Corporation is a Government Of India Maharatna company and is the largest power transmission company in India. The company went public in 2007 and comes under the Ministry Of Power. The company has a pan-India presence located in 256 cities, with over 174,601 circuit km of transmission lines and 273 substations.
Financials Of Power Grid Corporation:
|CMP||₹ 237||Market Cap (Cr.)||₹ 1,65,562|
|EPS||₹ 22.1||Stock P/E||10.8|
|ROCE||13.0 %||ROE||19.4 %|
|Face Value||₹ 10.0||Book Value||₹ 119|
|Promoter Holding||51.3 %||Price to Book Value||2.01|
|D/E Ratio||1.53||Dividend Yield||4.96 %|
|Net Profit Margin||33.8 %||Operating Profit Margin||86.4 %|
Power Grid Corporation Of India saw its revenues climb to ₹45,581 crores in FY 23, and a net profit of ₹15,417 crores. Sales growth has been slow for the past 5 years at just 8.7 percent. The company does however have a high net profit margin of 33.8 percent. The dividend yield is also quite high at 4.9 percent.
Stock P/E is much lower than its industry, at just 10.7 an industry figure of 23.9. The ROE of the company is 19.4 percent, as compared to a lower ROCE of just 13 percent. The company’s interest payments are higher than its operational expenses, showing that the debt and interest payments of the company are taking a sizable cut from its profitability.
It has a slightly high D/E ratio of 1.53, above the ideal range. Promoters of Power Grid Corporation, The Government Of India, own just over half the company at 51.3 percent. Power Grid has given a net positive return of 52.1 percent in the past 5 years.
List of Top Large Cap Dividend Stocks In India
|S. No.||Company||Market Cap (Rs in Cr.)||Dividend Yield (%)||CMP|
|5||Power Grid Corporation||165283.3||5.0||237.0|
Large Cap stocks that pay dividend, especially the ones that have a much higher dividend yield, are paying it out of a significant portion of their net profits. This is good news for shareholders for the moment, but with each dividend payment, the profits reduce the pace at which the company can grow, even after attaining large-cap status.
Additionally, the majority of dividends go back to the majority shareholders, which in most cases, are the promoters of the company and not retail investors. That’s all for this article on the best large cap dividend stocks in India. Happy Investing!
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