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High Dividend Growth Stocks in India

Dividend growth stocks are those stocks in which the dividend payout is high and also growing.

Such stocks offer the best of both worlds. The have a high dividend payout and the payout increases every year.

Marketcap: Largecap
Adj. DPS
(3 yrs CAGR, %)
(Rs m)
(Curr FY, x)
(5 yrs, Avg. %)
Profit CAGR
(3 yrs, %)
LIFE INSURANCE CORPORATION1,025.8157.7%6,488,18318.30.0134.5%136.8%
TATA STEEL153.2145.7%1,911,841NM0.814.2%90.3%
EICHER MOTOR3,785.0133.3%1,036,35431.00.017.6%16.8%
SHRIRAM TRANSPORT2,421.584.4%909,78113.73.813.2%33.8%
BAJAJ FINSERV1,609.068.2%2,567,06217.34.622.0%26.8%
HDFC BANK1,428.066.8%10,847,68418.17.415.3%19.1%
HCL TECHNOLOGIES1,640.348.0%4,451,22528.40.021.9%10.3%
HINDUSTAN ZINC311.446.3%1,315,55315.80.934.9%15.6%
L&T INFOTECH5,247.638.1%1,554,14733.80.028.4%42.6%
TECH MAHINDRA1,281.935.4%1,251,86143.80.119.3%7.6%
TATA CONSUMER1,208.733.3%1,151,69183.50.16.5%36.0%
VARUN BEVERAGES1,440.033.2%1,870,99989.00.717.6%48.6%
BAJAJ HOLDINGS & INVESTMENT8,883.632.4%988,681337.00.010.5%17.5%
BAJAJ FINANCE6,603.531.9%4,093,96929.74.017.3%29.8%
ULTRATECH CEMENT10,020.030.8%2,892,67645.20.211.8%NM
SUN PHARMA1,569.030.2%3,764,55741.80.18.9%26.9%
APOLLO HOSPITALS6,135.926.8%882,248109.00.411.2%26.8%

* We show NM where the values are negative

Disclaimer: This is for information purposes only. These are not stock recommendations and should not be treated as such. Learn more about our recommendation services here... Also note that these screeners are based only on numbers. There is no screening for management quality.

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Which are the top dividend growth stocks in India right now?

As per Equitymaster's Stock Screener, these are the top dividend growth stocks in India right now.

These companies are ranked based on the growth in dividend per share paid out in the past three years. A high value indicates that the company is paying out relatively more of its earnings in the form of dividends.

There are other parameters you should take into account as well before forming a hard opinion on the stock.

What is the dividend yield of a company and how is it calculated?

The dividend yield of a company is a financial ratio that measures the quantum of cash dividends paid out to shareholders relative to the market value per share.

It is calculated by dividing the annual dividend per share by the market price of the share.

Dividend Yield = 100% * (annual dividend per share/market price per share)

It is often expressed as a percentage of the market price of the share.

Here's an example...Suppose company X's stock price is Rs 300 and the company's dividend per share is Rs 10. Using the above formula, the dividend yield of a company is 3.3%.

This means that for every Rs 100 invested in the share, investors earn a dividend of Rs 3.3.

What kind of companies pay high dividends?

A company can do two things with the profits that it earns - It can either plough the profits back into the company for investing in capex, new products or distribution or pay out the amount as dividend and become a dividend stock.

As such, dividend payout depends a lot on the cash (after meeting its capital expenditure and working capital requirements) a company generates during a year.

Often companies do not need to reinvest into the business purely because they don't see the need for it.

A classic example would be of companies from the FMCG sector. The FMCG sector is a slow yet steady growing industry. But yet, companies choose to pay out huge dividends due to the sector's slow growing nature as capex requirements are on the lower side.

As against this commodity businesses like cement, steel, textile or even capital goods and telecom businesses need to constantly reinvest cash. This leaves very little on the table to pay to shareholders by way of dividends.

Is every high dividend yield company a good buy?

Absolutely not. Not all dividend stocks should be treated equally.

When identifying the right dividend stock to invest in, here's a few things to keep in mind...

A good dividend stock should be available at an attractive dividend yield. This does not mean the higher the yield, the better the stock. On the contrary, a higher yield can be a result of an extremely beaten down stock price.

But more importantly, a company with a high dividend yield should have good governance practices and must not have a history of ignoring the interest of minority shareholders.

Thus, along with the strong corporate governance, good growth prospects and a healthy dividend policy are crucial for investing well.

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