ONGC is an Indian oil exploration company majority owned by government of India, i.e. it’s a PSU. As a stock, it has a very long history of dividends. It’s a company with solid business model and has highly reliable cashflows. If you are an Indian investor focusing on dividends, it would be strange if you do not hold shares of ONGC. Ask anyone to name few great Indian companies which have paid generous dividends. We can bet that ONGC would definitely figure in such a list. We ourselves have chosen it for our Dead Monk’s Portfolio. We personally hold ONGC and another oil explorer Cairn Indiaas long term investments.
|ONGC’s Dividend Rates (%) : Last 10 years|
|ONGC’s Dividend Payout Ratio : Last 10 years|
- Factors to consider while deciding dividends: Future capital expenditure plans, profits earned during the financial year, cost of raising funds from alternate sources, cash flow position and applicable taxes including tax on dividends.
- As per govt.’s guidelines, all profit-making PSUs in oil sector (like ONGC) should declare the higher of a minimum dividend of 30 % on equity or a minimum dividend payout of 30 % of post-tax profit.
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