Top 5 Tata Group Stocks that Pay Good Dividends

Editor's note: The dividend season is on with many companies like Aster DM Healthcare already announcing a special dividend and a bonanza for shareholders.

Adding to the list of companies declaring dividends, not one but TWO companies from the Tata group recently announced paying a final dividend for FY24 soon.

The first is TCS, which made this announcement on Friday this week while announcing its Q4 results.

The other company is a no brainer, Tata Elxsi, which is set to declare a big dividend soon.

In FY23, these were the among the Tata companies that paid the highest dividend.

Tata Stocks Paying Dividends

Company Name	Latest Price	Latest Dividend Yield (%)	Dividend Per Share (FY23)
Tata Elxsi Ltd.	7752.65	0.78	60.6
Tata Investment Corporation Ltd.	6951.4	0.69	48
Tata Communications Ltd.	1946.7	1.08	21
Benares Hotels Ltd.	8791.95	0.23	20
Automobile Corporation of Goa Ltd.	2120.55	0.83	17.5
Tata Chemicals Ltd.	1147.95	1.52	17.5
Titan Company Ltd.	3619.7	0.28	10
Tata Consumer Products Ltd.	1146.6	0.74	8.45
Voltas Ltd.	1310.7	0.32	4.25
Tata Steel Ltd.	163.5	2.2	3.6
Rallis India Ltd.	278.75	0.9	2.5
Tata Technologies Ltd.	1090.3	0.23	2.46
Trent Ltd.	4054.75	0.05	2.2
Nelco Ltd.	743.6	0.27	2
Tata Motors Ltd.	1018.35	0.2	2
Tata Power Company Ltd.	437.05	0.46	2
The Indian Hotels Company Ltd.	607.25	0.16	1
Oriental Hotels Ltd.	135.05	0.37	0.5

Source: Equitymaster

Continue reading to find out more about these companies...

Top 5 Tata Group Stocks that Pay Good Dividends 2024

In the world of smart investments and steady returns, few names command as much respect and reliability as the Tata Group. Renowned for its rich history, diversified portfolio, and unwavering commitment to excellence, the Tata Group stands tall as a beacon of stability and success.

Investors seeking a blend of growth and income need to look no further, as the Tata Group stocks have consistently demonstrated their ability to deliver substantial dividends over the years.

This conglomerate, with its roots tracing back to 1868, has cultivated a reputation for weathering market storms while maintaining a focus on long-term value creation.

With their robust financial management and innovative approach to business, Tata Group stocks have proven time and again to be a reliable source of passive income for those with an eye on consistent, generous dividends.

Considering its long dividend history, here are five Tata companies worth tracking.

#1 TCS

Leading the list is none other than TCS.

Tata Consultancy Services (TCS) is a bright shining star in the galaxy of Tata Group companies.

The company is an Indian multinational information technology services and consulting company. It's the largest IT services company in Asia. It was the first company on the Bombay Stock Exchange (BSE) to reach US$ 100 bn marketcap in 2018.

It has a reputation for leveraging the latest technologies to serve customers across the world.

For the year ending March 2023, Tata Consultancy Services has declared a total equity dividend of 11,500%, amounting to Rs 115 per share.

This substantial dividend distribution includes a final dividend of Rs 24 per equity share of Rs 1 each of the company.

Furthermore, TCS has demonstrated its commitment to rewarding shareholders by disbursing a series of interim dividends throughout FY23. Notably, the company has distributed three interim dividends of Rs 8 each, in addition to a noteworthy special dividend of Rs 67.

TCS has consistently paid dividends since listing. Since 2004, the company has paid 80 dividends. Since 2005, the company has paid dividends at the end of every single quarter.

The five-year average dividend payout ratio stands at 60.7%. The dividend yield over the past five years has averaged 2.3%.

TCS Dividend History (2019-23)

	Mar-19	Mar-20	Mar-21	Mar-22	Mar-23
Dividend per share (Adj.) * (Rs)	30.8	74.9	38.4	43.0	115.0
Dividend payout ratio (%)	35.7	84.4	43.2	40.9	99.5
Dividend Yield (%)	1.5	4.0	1.2	1.2	3.6

*Adjusted for bonus issues and stock splits
Source: Equitymaster

IT companies have been in trouble recently because of global headwinds for IT companies. However, the company still managed to pay dividends because of its deep pockets.

Moving ahead, companies plan to increase investment in cloud computing, artificial intelligence, and blockchain.

For more details, see the TCS company fact sheet and quarterly results.

Update: While announcing its Q4 results for the year ended March 2024, the IT bellwether also announced a BIG final dividend.

Tata Consultancy Services said it will pay a final dividend of Rs 28 per equity share.The big dividend announcement comes after the company registered record deals wins and robust margins mark a strong finish to the year.

#2 Titan

The second on the list is Titan.

You probably guessed this company at the start when you opened this article as that's the brand image Titan has created over the years. It has grown from a Tata group penny stock to a behemoth which contributes a significant chunk of revenues for the Tata group, Titan has come a long way.

It's the largest jewellery retailer in the country, with a 7% market share as of December 2022. Titan sells jewellery through brands such as Tanishq, Mia, CaratLane, and Zoya. It has a strong retail presence with over 685 stores across India. It is also the world's fifth largest, and India's largest, watch company.

In FY23, Titan declared an equity dividend of 1,000%, amounting to Rs 10 per share. Demonstrating unwavering consistency, the company has maintained a steady stream of dividends over recent years, distributing 23 dividends since 2001.

The five-year average dividend payout ratio stands at 29.9%. The dividend yield over the past five years has averaged 0.3%.

Titan Dividend History (2019-23)

	Mar-19	Mar-20	Mar-21	Mar-22	Mar-23
Dividend per share (Adj.) * (Rs)	5.0	4.0	4.0	7.5	10.0
Dividend payout ratio (%)	32.0	23.8	36.5	30.3	27.1
Dividend Yield (%)	0.4	0.4	0.3	0.3	0.4

*Adjusted for bonus issues and stock splits
Source: Equitymaster

The company is confident of good growth. It aspires to strengthen its international presence to 25 international stores by the end of FY24. Growth will be primarily driven by additions in the GCC (Gulf Cooperation Council countries) region.

The company is well placed in terms of headroom for market share-led revenue growth. This is due to its strong competitive moat. Jewellery purchases in India are rapidly shifting to organised players resulting in strong revenue growth.

For more details, see the Titan company fact sheet and quarterly results.

Update: In the first nine months of FY24, Titan has opened 43 Tanishq stores, 51 Mia stores, 1 Zoya store, and 40 Caratlane stores. It is constantly expanding its reach with 1,800+ watch outlets and 975 eyewear stores.

The company has also diversified into the fashion segment, including online presence at Tata CLiQ, Ajio, Nykaa, Myntra, etc.

Thanks to rising gold price, Titan's stock price has been moving up steadily, increasing by over 47% over the last year.

#3 Tata Consumer

Third on the list is Tata Consumer.

Tata Consumer is the food, beverages and out-of-home retail arm of the Tata Group. It's the 7th largest fast moving consumer goods (FMCG) company in India.

Home to a diverse range of iconic brands like Tetley, Himalaya, Tata Cha, and Starbucks, the company commands a global presence across major countries on four continents.

The board recommended a final dividend of Rs 8.45 per equity share of Rs 1 each (845%) for the FY23.

The company has a strong history of dividends. It has declared 24 dividends since 2001. The five-year average dividend payout ratio is 45.5%. The dividend yield over the past five years has averaged 0.9%.

Tata Consumer Dividend History (2019-23)

	Mar-19	Mar-20	Mar-21	Mar-22	Mar-23
Dividend per share (Adj.) * (Rs)	1.7	2.7	4.0	6.0	8.5
Dividend payout ratio (%)	33.3	46.5	37.6	51.7	58.3
Dividend Yield (%)	1.2	0.9	0.6	0.8	1.2

*Adjusted for bonus issues and stock splits
Source: Equitymaster

The company recently reached a new milestone in its sales and distribution expansion. It's on track to achieving a total reach of 4 m outlets.

The company is embedding digital transformation across the business and will be using this to drive decision-making in new product development, procurement, and revenue growth management.

Tata Consumer is also looking to make an enormous runway in the out-of-home retail segment with accelerated expansion plans for Starbucks. The company plans to open 1,000 outlets in India over the next few years.

For more details, see the Tata Consumer company fact sheet and quarterly results.

Update: Note that Tata Consumer has seen a sharp turnaround in sentient following its acquisition of Capital Foods.

This acquisition is expected to enable the company to expand its product portfolio and further strengthen its pantry platform. The overall size of the categories in which Capital Foods operates is estimated at Rs 214 bn.

Going forward, Tata Consumer is looking at international markets, particularly emerging economies, where its brands can resonate with consumers seeking value and quality.

#4 Tata Coffee

Fourth on the list is Tata Coffee.

Asia's largest integrated coffee company engages in the production and distribution of coffee and tea in Indian and international markets.

It also manufactures pepper in its coffee and tea estates and is the world's largest corporate producer of Indian-origin black pepper.

For the financial year 2023, the company has declared a final dividend of Rs 3 per equity share on a face value of Rs 1 each. The company has had 26 dividends since 2001.

The five-year average dividend payout ratio stands at 18.6%. The dividend yield over the past five years has averaged 1.6%.

Tata Coffee Dividend History (2019-23)

	Mar-19	Mar-20	Mar-21	Mar-22	Mar-23
Dividend per share (Adj.) * (Rs)	1.5	1.5	1.5	2.0	3.0
Dividend payout ratio (%)	26.2	19.9	13.2	16.0	17.4
Dividend Yield (%)	1.7	2.7	1.3	0.9	1.5

*Adjusted for bonus issues and stock splits
Source: Equitymaster

Going forward, Tata Coffee plans to expand its retail presence in India and other parts of the world. The company plans to open more retail stores.

Tata Coffee is investing in research and development to develop new coffee varieties and improve the quality of its coffee products. The company is also working on developing new ways to process and roast coffee beans.

For more details, see the Tata Coffee company fact sheet and quarterly results.

#5 Tata Power

Last on the list is Tata Power.

Tata Power is engaged in the business of power generation, transmission, and distribution through conventional and renewable sources.

The company has an installed capacity of 8,860 megawatts (MW) of conventional energy and 5,125 MW of renewable energy as of September 2022. Of the total capacity, 63% is conventional and 37% is renewable energy.

Tata Power also manufactures solar panels and is setting up electric vehicle (EV) charging stations across the country.

For the financial year 2023, the company has declared a final dividend of Rs 2 per equity share of Rs 1 each. With a history of over two decades, the company has disbursed a total of 24 dividends since 2001.

The five-year average dividend payout ratio stands at 21.7%. The dividend yield over the past five years has averaged 1.9%.

Tata Power Dividend History (2019-23)

	Mar-19	Mar-20	Mar-21	Mar-22	Mar-23
Dividend per share (Adj.) * (Rs)	1.1	1.3	1.6	1.8	2.0
Dividend payout ratio (%)	12.9	24.3	33.4	21.3	16.8
Dividend Yield (%)	1.8	4.7	1.5	0.7	1.1

*Adjusted for bonus issues and stock splits
Source: Equitymaster

Going ahead, the company has announced a massive Rs 750 bn capex to increase the share of renewable energy in its portfolio to 60% by 2027, taking the total installed capacity to 30,000 MW.

It also plans to set up around one lakh EV charging stations by 2026 to support the EV revolution and invest Rs 30 bn in setting up a 4-gigawatt solar plant in Tamil Nadu.

It plans to become net zero by 2024 by using clean and greener energy.

For more details, see the Tata Power company fact sheet and quarterly results.

Update: Tata Power was among the biggest gainers of FY24, with its share price moving up owing to the company's increased focus on green energy and India's EV revolution.

In line with this mission, the company has announced a Rs 700 bn green energy plan to install 10 GW of solar and wind power capacity in the next five to seven years.

It also plans to install over 1 lakh charging stations by 2025.

Given the government's renewable energy target and the company's plans to become carbon neutral, Tata Power is poised for growth in the medium term.

Conclusion

The Tata group's long-standing presence, trusted brand image, and commitment to excellence has made it a preferred choice among investors seeking stable and profitable investments.

The Tata group has big goals for its upcoming stage of development. With a renewed emphasis on India, the group is planning to devote over 80% of its capital expenditures to local businesses over the next five years, with an expected investment of US$ 90 bn.

It includes Tata Power's plan to spend over US$ 10 bn over the next five years in renewable energy, a US$ 5 bn project to build Giga factories and its investments in electronics. The group also intends to make 5G telecom gear and is also beefing up its play in the semiconductor space.

This growth makes the group stocks more attractive for the future and creates a positive outlook for dividends. However, like any other investments they have inherent risks too.

Within the Tata group, these were the companies that did not pay any dividend in FY23. It'll be interesting to see whether these companies reward their shareholders this year.

Tata Group Stocks that DO NOT Pay Dividends

Company Name	Latest Price	Latest Dividend Yield (%)	Dividend Per Share (FY23)
Artson Engineering Ltd.	154.45	0	0
Automotive Stampings and Assemblies Ltd.	770.55	0	0
Tata Teleservices (Maharashtra) Ltd.	78.38	0	0
Tayo Rolls Ltd.	94.46	0	0
Tejas Networks Ltd.	782.95	0	0
TRF Ltd.	438.05	0	0

Source: Equitymaster

Investors should conduct thorough research and carefully assess financial health, track record, and growth potential before making investment decisions.

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