The Biggest Dividend Payers of 2016
The last year was full of a lot of optimism with the Indian economy largely enjoying a great story of growth. Domestic markets also performed quite well, with several firms issuing respectable dividends. However, it’s when the markets turn sick and the future looks uncertain that companies who pay consistent dividends over all else seem to be the most interesting people at a party. Here at AliceBlue, we’re going to break down the top five highest dividend payers of 2016 from the NSE Stock Exchange. These large caps were preferred for tending to be less volatile , and ended up paying a total of Rs. 51,750 crore in 2016 as dividends.
The Indian government-controlled coal mining company Coal India Limited (CIL), also India’s largest Coal Producer, was the top payer of dividends in 2016. With about 79.65% of shares being held by the Government of India and the remainder being distributed among foreign institutional investors, domestic institutions and non-institutions CIL has always been a respected publicly traded government institution. Even after a weak Q3 performance, CIL was able to keep its share value sustained as well as investor sentiments in check by offering substantial dividends this year. They led the pack by paying a total dividend amount of Rs. 17,300 crore. This was a massive 32% increase from the previous year’s amount paid out in 2015.
The next highest distributor of dividends was Hindustan Zinc Limited (HZL). A subsidiary of Vedanta Resources PLC, HZL is an integrated mining and resources producer. The company’s revenues in FY2015 were Rs. 14,788 Crores, and it is well known as the world’s second largest producer of commodity base metal zinc. With a 29.54% stake in the company being held by the Government of India and the rest being primarily held by Vedanta Limited, it has been a very successful publicly traded firm. Q3 of 2016 was a very positive one for HZL and they outperformed their previous quarter net profit by over 83.43% which is a superb increase. This reflected superbly on their earnings per share, and the company went on to have a very high debt repayment which perhaps explains the high dividend paybacks.
Tata Consultancy Services
Being one of India’s most respected companies and one of the biggest movers and shakers in the IT industry Tata Consultancy Services (TCS) has long been an investor favourite amongst Indian firms. A subsidiary of the Tata Sons Group, TCS operates in over 46 countries. It is also one of the largest Indian companies as measured by market capitalisation ($80 Billion). In fact, 70% of the revenues of Tata Sons is generated by TCS. While Q3 performance for TCS was steady and unsurprising, it seems to have a reached a lull. This has however not been reflected in the earnings per share, which are at Rs. 34.40, a respectable amount that has come at a time when the markets are quite uncertain.
Oil and Natural Gas Corporation Limited
The Oil and Natural Gas Corporation Limited (ONGC) an organisation based in Dehradun, Uttarakhand India. The firm is controlled administratively by the Ministry of Petroleum and Natural Gas, and is also a Public Sector Undertaking (PSU) of the Indian Government. The ONGC is the country’s largest gas and oil production company, producing close to 77 percent of India’s petroleum and about 62 percent of its petroleum gas. The primary shareholder of the ONGC is the government of India with a total of 68.94 percent of all shares being held by them. The remaining shares are distributed among various government companies, banks and financial institutions, foreign institutions etc. The ONGC also experienced a generally lacklustre Q3 but still managed to give back steady dividends to shareholders in 2016.
Headquartered in Kolkata, West Bengal, ITC is an Indian conglomerate which has diversified its business considerably over five segments, which are namely FMCG, Hospitality, Paperboards & Packaging, Agri Sector and Information Services. Established in 1910 as the Imperial Tobacco Company of India Limited and later renames the Indian Tobacco Company in 1970, ITC has a long and storied history in the country. ITC has been known as one of the most steady performing large-cap shares and this was true for their Q3 2016 performance as well. This led to significantly reasonable dividend payments in a year when such things were not so easily seen. Apart from CIL, the other companies mentioned all managed to pay dividends in amounts ranging from Rs. 6,800-8,570 crore over the course of 2016.