It looks like Bharat Petroleum Corporation Limited (NSE:BPCL) is about to go ex-dividend in the next 3 days. The ex-dividend date is two business days before a company’s record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade can take two business days or more to settle. Meaning, you will need to purchase Bharat Petroleum’s shares before the 2nd of February to receive the dividend, which will be paid on the 21st of February.
The company’s next dividend payment will be ₹10.00 per share, on the back of last year when the company paid a total of ₹22.50 to shareholders. Based on the last year’s worth of payments, Bharat Petroleum stock has a trailing yield of around 6.2% on the current share price of ₹362.35. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Bharat Petroleum has been able to grow its dividends, or if the dividend might be cut.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That’s why it’s good to see Bharat Petroleum paying out a modest 39% of its earnings. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. Thankfully its dividend payments took up just 34% of the free cash flow it generated, which is a comfortable payout ratio.
It’s encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don’t drop precipitously.
See our latest analysis for Bharat Petroleum
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
NSEI:BPCL Historic Dividend January 29th 2026 Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That’s why it’s comforting to see Bharat Petroleum’s earnings have been skyrocketing, up 49% per annum for the past five years. Earnings per share have been growing very quickly, and the company is paying out a relatively low percentage of its profit and cash flow. This is a very favourable combination that can often lead to the dividend multiplying over the long term, if earnings grow and the company pays out a higher percentage of its earnings.
The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Bharat Petroleum has lifted its dividend by approximately 20% a year on average. It’s exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
The Bottom Line
Is Bharat Petroleum an attractive dividend stock, or better left on the shelf? It’s great that Bharat Petroleum is growing earnings per share while simultaneously paying out a low percentage of both its earnings and cash flow. It’s disappointing to see the dividend has been cut at least once in the past, but as things stand now, the low payout ratio suggests a conservative approach to dividends, which we like. It’s a promising combination that should mark this company worthy of closer attention.
While it’s tempting to invest in Bharat Petroleum for the dividends alone, you should always be mindful of the risks involved. To that end, you should learn about the 2 warning signs we’ve spotted with Bharat Petroleum (including 1 which is a bit unpleasant).
If you’re in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
Discover if Bharat 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.