Hindustan Petroleum Corporation Limited (NSE:HINDPETRO) is reducing its dividend from last year’s comparable payment to ₹10.50 on the 21st of September. This means the annual payment is 2.6% of the current stock price, which is above the average for the industry.
Hindustan Petroleum’s Projected Earnings Seem Likely To Cover Future Distributions
Impressive dividend yields are good, but this doesn’t matter much if the payments can’t be sustained. However, Hindustan Petroleum’s earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.
The next year is set to see EPS grow by 7.1%. If the dividend continues along recent trends, we estimate the payout ratio will be 22%, which is in the range that makes us comfortable with the sustainability of the dividend.
NSEI:HINDPETRO Historic Dividend August 13th 2025
View our latest analysis for Hindustan Petroleum
Dividend Volatility
Although the company has a long dividend history, it has been cut at least once in the last 10 years. The dividend has gone from an annual total of ₹2.3 in 2015 to the most recent total annual payment of ₹10.50. This works out to be a compound annual growth rate (CAGR) of approximately 16% a year over that time. Hindustan Petroleum has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.
The Dividend Looks Likely To Grow
With a relatively unstable dividend, it’s even more important to see if earnings per share is growing. It’s encouraging to see that Hindustan Petroleum has been growing its earnings per share at 22% a year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.
We Really Like Hindustan Petroleum’s Dividend
Overall, we think that Hindustan Petroleum could be a great option for a dividend investment, although we would have preferred if the dividend wasn’t cut this year. Reducing the amount it is paying as a dividend can protect the company’s balance sheet, keeping the dividend sustainable for longer. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we’ve picked out 2 warning signs for Hindustan Petroleum that investors should know about before committing capital to this stock. Is Hindustan Petroleum not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
Discover if Hindustan Petroleum might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.