Dividend investing is one of the best ways to build a portfolio that not only gives a decent capital appreciation but also helps to generate a regular cash flow in the form of regular payouts. Dividends are a part of the net earnings of the company that is distributed amongst shareholders.
These dividends are heavily dependent on the profits, dividend policy, and capital needs of the business, but there are a few profitable PSUs that are consistently paying high dividends for at least a decade. Listed below are three such government-owned companies that dividend seekers can keep on the radar as the broader market plunges.
REC Limited
Formerly known as Rural Electrification Corporation of India, now REC Ltd (NS:) is a Navratna company that provides specialized financial services, catering to the power sector. The company has a market capitalization of INR 28,017 crores and clocked a highest-ever annual net revenue and profit of INR 39,339.2 crores and 10,035.7 crores, respectively in FY22.
The company has consistently been paying dividends for the last 10 years and currently trading at a dividend yield of 12.26% and paid a total dividend of INR 11.48 per share in FY22. The dividend payout ratio is somewhat ok at 0.3.
NMDC Limited
NMDC Ltd (NS:) is the largest iron ore producer in India and comes under the administration of the Ministry of Steel. The company has a market capitalization of INR 36,823 crores and explores a wide range of minerals including , rock phosphate, limestone, magnesite, diamond, etc.
All thanks to the soaring prices of metals, the company recorded a 49.4% YoY jump in net income to INR 9,379.05 crores which allowed the company to increase its dividend payout by 89.9% to INR 14.7 per share in FY22. Although, metal prices have significantly retraced from the higher levels, but the company’s aggressive dividend-paying policy hasn’t disappointed investors for many years with the TTM payout ratio being over 0.56 and currently trading at a yield of 11.7%.
Indian Oil Corporation Limited
The last company on the list is a Delhi-headquartered oil refiner Indian Oil Corporation Ltd (NS:) having a market capitalization of INR 1,01,037 crores and comes under the Ministry of Petroleum and . The company has been increasing its revenue at a yearly rate of 10.53% over the last 5 years and clocked the highest revenue of INR 5,93,653 crores in FY22.
IOC paid a total of INR 8.4 per share in dividends in FY22 and recently announced a bonus of 1:2 as well. In fact, since 2016, the company has issued bonus shares 3 times! making it one of the special attractions for investors. The current dividend yield of the company is around 11.45% with a healthy TTM payout ratio of 0.52.
Disclaimer – I have REC shares in my portfolio. None of the above-mentioned securities is a recommendation to buy/sell/hold the same.
