Daijiworld Media Network - Mumbai

Mumbai, Sep 12: Investors looking at dividend-paying stocks need to weigh both historical returns and present valuations before making decisions. Data compiled by NDTV Profit highlights the performance of some of India’s most prominent companies, including TCS, Infosys, Bajaj Auto, HUL and Nestle.

Tata Consultancy Services (TCS) stands out with the highest cumulative dividend payout of Rs 649.5 per share over the past decade, alongside a return of 145.74% since April 1, 2015. With a one-year forward PE ratio of 21.04 compared to its five-year average of 29.12, TCS appears attractively valued, offering a potential return of 18%. Over the years, TCS has maintained a robust dividend record, declaring 46 dividends, including interim, final and special payouts, in addition to share buybacks.

Bajaj Auto has rewarded investors with the highest return of 351.21% since April 2015 and cumulative dividends worth Rs 610 per share. However, with a forward PE of 25.77 versus a five-year average of 24.17, its return potential now stands at just 0.4%, suggesting limited upside.

Infosys, another IT major, paid cumulative dividends of Rs 313.5 per share while generating a return of 177.78% in the last decade. Its one-year forward PE of 21.27, lower than the five-year average of 26, points to a return potential of 15.4%, making it an appealing pick for dividend-seeking investors.

On the other hand, Hindustan Unilever Ltd (HUL) delivered cumulative dividends of Rs 308.5 with a return of 196.7%. But the company’s current valuation looks stretched, with a forward PE of 53.59, only slightly below its five-year average of 54.92, translating into a negative return potential of 7.7%.

Meanwhile, Nestle India, another consumer giant, too appears overvalued despite offering strong returns, making it less attractive compared to IT majors TCS and Infosys, which combine steady dividends with more reasonable valuations.