Recently, tensions between India and Pakistan have been escalating due to terrorist attacks in Pahalgam, and this has put a spotlight on several defence-related stocks. Besides the geopolitics, many of these stocks have also attracted attention because of their announced dividends. If you are considering investing in defence stocks, we have identified three that offer the highest dividend yield.
Hindustan Aeronautics, a heavyweight in the aerospace and defence field, is one such option. Over the past year, this company has achieved an annual dividend yield of 0.85%. As part of their interim actions for Q3FY25, they distributed a dividend of Rs 25. This was, indeed, the only dividend they furnished during FY25.
This formidable company’s market capitalisation has reached Rs 3.08 lakh crore as per the data available on April 30. Hindustan Aeronautics, as a largecap stock, has been able to gain the trust of both international and local institutional investors who held 12.3% and 8.2% of the total shares, respectively.
Another defence stock to have on your radar is Bharat Forge. This company, which operates in the forgings sector, has reported an annual dividend yield of 0.82%. In the third quarter of FY25, Bharat Forge issued a dividend payout amounting to Rs 2.5 for every equity share, its lone payout for the financial year 2024-25.
As of April 30, Bharat Forge, also classified as a largecap stock has attained a market capitalisation of a significant Rs 54,126.80 crore. Alongside, Investors should note that Bharat Forge reported a net profit of Rs 212.78 crore during Q3 FY25, although this represented a contraction of 16.4% compared to the previous year.
The newly enlisted Nifty 50 member, Bharat Electronics, can be considered another viable investment in the defence sector. This company that additionally operates in the aerospace and defence sector, has shown an annual dividend yield of 0.75%.
Throughout FY25, Bharat Electronics announced an interim dividend of Rs 1.5 per equity share. This declaration was made specifically with an ex-dividend date of March 11. The time period in question saw no other dividend announcements from the company.
Bharat Electronics, like the other two firms, holds a large market capitalisation, which stood at Rs 2.32 lakh crore as of April 30. Over the previous month, Bharat Electronics has witnessed its share price surge by 7.44%.
These three defence companies stand out as potential considerations for investors on account of both their high dividend yields and the evolving geopolitical climate. They consistently display signs of stability, both in terms of investor trust and capitalisation.
Yet with investments comes the need for due diligence. Hence, it’s necessary to consider these details alongside factors such as company financials, future strategic plans and overall market sentiment before making investment moves.
Moreover, it is wise to keep in mind that the defence sector can be unpredictable due to its connection to geopolitical events. Market fluctuations linked to defence stocks could be tied to relations between countries and the general stability of the global environment.
Investors are also advised to review the present & future policies of the country in which these companies operate. Any significant policy change related to the defence sector could critically impact the performance of these stocks.
In conclusion, Hindustan Aeronautics, Bharat Forge, and Bharat Electronics provide strong dividend yields and robust market capitalisation. These aspects, combined with their inclusion in the important aerospace and defence sector, make them worth considering for potential investors.
However, like all investment decisions, key personal factors should be taken into account. These include the individual’s risk tolerance, investment horizon, and overall portfolio composition. As always, it is ideal to consult with a financial advisor before making substantial investment decisions.
In an ever-changing global landscape characterized by both opportunities and uncertainties, keeping oneself informed and making well-thought-out investment decisions is the key to navigating the financial markets successfully.
The post India’s Defence Stocks Surge Amid Rising Geopolitical Tensions appeared first on Real News Now.
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