
Dividend powerhouses to invest in: Raja Venkatraman’s top picks
Subscribe to enjoy similar stories. The first quarter of 2025 has been a washout in terms of portfolios and market expectations because of a combination of factors including the depreciating rupee, elevated market valuations, and a deceleration in earnings growth. Moreover, foreign institutional investors (FIIs) have been selling persistently due to a strong dollar, high US bond yields, and uncertainties over US President Donald Trump’s policies.
Investing in strong dividend-paying stocks can create a reliable income stream while fostering long-term wealth. Here’s how to make informed choices: A sustainable yield of 4-5% is a good benchmark. Avoid stocks with abnormally high yields as these may signal financial distress rather than genuine strength.
Reliable dividend-paying companies have a track record of stable or growing payouts. Public sector undertakings like Coal India Ltd and NTPC Ltd stand out for their consistency even during economic downturns. A company’s ability to maintain dividends depends on solid financials.
Favour businesses with steady profits, healthy cash flows, and low debt to ensure continued shareholder rewards. Sectors like fast-moving consumer goods (FMCG), utilities, and energy remain resilient in volatile markets. These industries house many companies with strong, predictable dividend policies.
An ideal payout ratio falls between 40-60%, balancing shareholder rewards and reinvestment. A very high ratio might be unsustainable if earnings drop. Government-owned enterprises are often required to distribute a portion of their profits.
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