5 Midcap Stocks That Could Announce Big Dividends This Year

In 2022, the Russia Ukraine war, high inflation, and interest rate hikes, affected stock markets across the globe. Many were hoping that 2023 will be different and the new year will bring new investment opportunities.

Unfortunately, the same sentiment has continued this year, but the reasons are different. There's volatility in the Indian share market because of the Adani-Hindenburg saga and poor quarterly results.

The US Federal Reserve recently said that interest rates could go higher than expected, which has added to the worries.

Amid this chaos, you should carefully select the best dividend stocks to buy.

Dividend stocks make an excellent investment alternative as they provide a regular source of income and help grow your portfolio returns in the long term.

Recently, we covered articles discussing small-cap stocks that could offer big dividends in 2023 and the penny stocks that could offer massive payouts in 2023.

In today's article, we take a look at five midcap stocks that have paid dividends consistently in the past and are likely to do so in the future.

#1 Hindustan Aeronautics

First on the list is Hindustan Aeronautics.

The company supplies aircraft, helicopters, engines, avionics, and accessories and is the main provider of maintenance, repair, and overhaul services to the Indian defence forces.

Ever since its listing in 2018, Hindustan Aeronautics has declared eight dividends to its shareholders.

Its five-year average dividend payout and dividend yield stand at 37% and 3.4%, respectively, making it the most attractive midcap government enterprise.

Hindustan Aeronautics Dividend Per Share Over the Years

Date of Dividend	Dividend Type	Dividend (Rs)
04-11-2022	Interim	20
28-06-2022	Final	10
31-01-2022	Interim	26
11-11-2021	Interim	14
18-02-2021	Interim	15
09-12-2020	Final	15
11-03-2020	Interim	33.25
18-03-2019	Interim	19.8

Source: BSE

The dividend per share has been growing consistently in the last five years on the back of steady growth in revenue and profit.

During the FY18-22 period, sales went up over 33%, and the net profit went up by over 150%. A heavy order book and the cost-plus nature of majority of HAL's contracts are the primary reasons for revenue and profit growth.

The return ratios are also high, with a 5-year average return on equity (RoE) at 22% and a 5-year average return on capital employed (RoCE) at 31%.

To add to this, the company paid off all its debt in financial year 2022 and has healthy cashflows.

As of September 2022, the company has an order book of Rs 838.6 billion (bn), indicating good revenue visibility in the medium term.

All these indicate a high dividend for shareholders in 2023.

In the last one year, shares of the company have zoomed by 105%.

#2 Colgate-Palmolive (India)

Second on the list is Colgate-Palmolive.

An FMCG company that has maintained its leadership since 1990, Colgate has over 51% market share in toothpaste, 48% in toothpowder, and 30% share in the toothbrush market.

The company has been consistent in paying dividends to its shareholders since 2001.

In the last five years, its dividend payout and dividend yield have averaged 94.3% and 2.3%, respectively.

Colgate Palmolive Dividend History

Date of Dividend	Dividend Type	Dividend (Rs)
20-10-2022	Interim	18
23-03-2022	Interim	21
06-10-2021	Interim	19
10-03-2021	Interim	20
12-10-2020	Interim	18
15-05-2020	Interim	16
07-10-2019	Interim	12
14-05-2019	Interim	8
19-03-2019	Interim	7
12-10-2018	Interim	8
18-05-2018	Interim	11
05-03-2018	Interim	5
04-12-2017	Interim	4
03-10-2017	Interim	4
27-03-2017	Interim	3
16-11-2016	Interim	3
07-10-2016	Interim	4
02-03-2016	Interim	3
19-11-2015	Interim	3
05-10-2015	Interim	4
09-03-2015	Interim	8
20-11-2014	Interim	8
04-09-2014	Interim	8
19-03-2014	Interim	9
11-11-2013	Interim	9
24-09-2013	Interim	9
01-03-2013	Interim	9
08-11-2012	Interim	6
31-08-2012	Interim	13
21-02-2012	Interim	8
08-11-2011	Interim	9
31-05-2011	Interim	8
28-02-2011	Interim	7
15-11-2010	Interim	5
19-07-2010	Interim	10
12-03-2010	Interim	5
05-11-2009	Interim	7
17-07-2009	Interim	8
26-02-2009	Interim	6
07-11-2008	Interim	9
30-05-2008	Final	7
05-11-2007	Interim	6
03-05-2007	Final	2
01-03-2007	Interim	3.3
09-10-2006	Interim	4.3
13-02-2006	Interim	1.8
09-11-2005	Interim	3
29-07-2005	Interim	2.8
15-04-2005	Interim	1.5
05-11-2004	Interim	4
15-06-2004	Interim	1.5
19-03-2004	Interim	1.3
11-11-2003	Interim	2.6
14-08-2003	Interim	2.3
19-05-2003	Interim	2
15-11-2002	Interim	2.3
26-04-2002	Interim	1.8
23-01-2002	Interim	2.5
07-06-2001	Final	8.3

Source: BSE

Being an FMCG company, Colgate is cash rich and has strong cashflows.

In the last five years, its revenue and profits have grown by 25% and 60%, respectively. Throughout this five-year period, not once did the company see its revenue or profit decline. This speaks volumes about the quality of products and management of the company.

Considering all this, along with its zero-debt status and its dividend-paying history, shareholders can expect a similar or higher payout in 2023.

Shares of Colgate Palmolive have given muted returns in the last one year.

#3 Oil India

Next on the list is Oil India, another state-owned company.

It is a fully integrated oil and natural gas company engaged in exploring, developing, producing and transporting crude oil, natural gas, and liquified petroleum gas (LPG).

The company also produces electricity through solar, wind, and green hydrogen sources.

In the last five years, its revenue has grown at a compound annual growth rate (CAGR) of 14%, owing to steady volume growth. The profits also grew at a CAGR of 28% during the same time.

As a result, the company boasts of increasing margins, strong cashflows, and high return ratios.

Coming to the company's dividends, it has paid dividends consistently and has declared thirty-two dividends in the last thirteen years.

Oil India Dividend History

Date of Dividend	Dividend Type	Dividend (Rs)
10-02-2023	Interim	10
10-11-2022	Interim	4.5
27-05-2022	Final	5
11-02-2022	Interim	5.8
10-11-2021	Final	3.5
21-06-2021	Final	1.5
11-02-2021	Interim	3.5
26-06-2020	Final	1.6
10-02-2020	Interim	9
27-05-2019	Final	1.8
12-02-2019	Interim	8.5
28-05-2018	Final	1
09-02-2018	Interim	14
31-05-2017	Final	4.8
31-01-2017	Interim	9.5
27-05-2016	Final	8
30-12-2015	Interim	8
29-05-2015	Final	10
10-03-2015	Interim	10
27-05-2014	Final	0.5
14-03-2014	Interim	10
28-01-2014	Interim	11
27-05-2013	Final	7
07-03-2013	Interim	12
11-01-2013	Interim	11
28-05-2012	Final	5
11-02-2012	Interim	10
21-12-2011	Interim	25
31-05-2011	Final	19.5
22-12-2010	Interim	18
27-05-2010	Final	16
01-02-2010	Interim	18

Source: BSE

In the last five years, its dividend payout and dividend yield have averaged 35.9% and 6.1%, respectively.

So far for 2023, the company has declared two interim dividends totalling to Rs 14.5 per share, which is already higher than previous year's dividend payout.

In the first nine months of the financial year 2023, the company's revenue and profits have already crossed the previous year's numbers. This indicates a possibility of a higher dividend in 2023.

Oil India shares have gained 7.2% in the past one year with most gains coming in recent sessions on the back of rising crude prices.

#4 Oracle Financial Services Software (OFSS)

Fourth on the list is Oracle Financial Services Software.

There's nothing new about IT companies paying big and consistent dividends. But, when we think about IT companies and dividends, the first few names that come to mind are TCS, Infosys, Wipro, and HCL.

After all, these Big 4 IT companies have emerged as consistent wealth creators for millions of investors over the last few decades.

However, when it comes to dividend payments, Oracle Financial Services Software (OFSS) stands above any other IT company.

The company started paying dividends in 2003, and whenever it did, it paid big.

Oracle Financial Dividend History

Date of Dividend	Dividend Type	Dividend (Rs)
04-05-2022	Interim	190
05-05-2021	Interim	200
11-05-2020	Interim	180
11-05-2018	Final	130
06-04-2017	Interim	170
12-05-2016	Final	100
15-05-2015	Final	180
12-09-2014	Interim	485
08-05-2006	Final	5
29-04-2005	Final	5
26-05-2004	Final	3.5
16-05-2003	Final	2.5

Source: BSE

A steady increase in dividends is due to increased profitability.

In the last five years, the company's net profit went up by 52.7%. The return ratios are also high, with RoE at 27.2% and RoCE at 36.6% in financial year 2022.

Why is Oracle Financial's profitability steadily increasing?

In recent years, OFSS has made significant investments in rapidly moving its solutions to the cloud and launched solutions, much ahead of its peers.

This worked well for the company as the pace of investment by financial services companies in digital capabilities had grown significantly and is expected to continue over the coming years.

In the last five years, Oracle Financial's dividend payout and dividend yield have averaged 76% and 4.4%, respectively.

In the first nine months of the financial year 2023, the company's profits have already crossed 70% of the previous year's profits. This indicates a possibility of a higher dividend in 2023.

Like any other IT company, OFSS has also faced the heat of the market.

#5 Nippon Life India Asset Management

Last on the list is Nippon Life India Asset Management, one of India's largest asset management companies.

It is engaged in the business of managing mutual funds, pension funds, and alternative investment funds and offers portfolio management services.

It offers its products and services to retail, HNI (high net worth), institutional, corporate, and offshore investors.

During the FY18-22 period, the company's net profit went up by over 63%. A growing number of investors and cost optimisation measures undertaken by the company have contributed to the growing profits.

As a result, the company's return ratios are increasing, and so are its cashflows. The company is also a zero-debt company.

Ever since its listing in 2017, the company has paid eleven dividends to its shareholders.

Nippon Life India AMC Dividend History

Date of Dividend	Dividend Type	Dividend (Rs)
19-10-2022	Interim	4
26-04-2022	Final	7.5
26-10-2021	Interim	3.5
27-04-2021	Final	5
27-01-2021	Interim	3
15-05-2020	Final	2
23-01-2020	Interim	3
30-04-2019	Interim	3
22-01-2019	Interim	3
25-04-2018	Final	1
16-01-2018	Interim	5

Source: BSE

Its five-year average dividend payout and dividend yield stood at 78.7% and 2.4%, respectively.

The company has already paid Rs 4 as an interim dividend this year, which is higher than last year's interim dividend.

Going by its track record of paying dividends, shareholders can expect a similar dividend even this year.

In the last one year, shares of Nippon Life India Asset Management have fallen by 26% due to market volatility.

Since dividend stocks interest you, check out the below video where Richa Agarwal talks about dividend multibaggers for 2023.

Happy investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...