Coal India vs ITC Dividend: Which Stock Is the Real Dividend Multiplier? Yield, Payout, Earnings Trend, Price Return, Where Vedanta, Power Grid and Hindustan Zinc Fit and How to Tell Income From a Yield Trap
- October 8, 2026
- Posted by: Kunal Singla
- Category: News
Coal India: LTM dividend Rs 26.50, yield about 6.4-6.6% at Rs 404-413, P/E 8.2, payout 47%. ITC: Rs 14.50, yield about 5.7% at Rs 256, payout 74%, profit falling. Yield is not durability.
Quick Answer
Coal India vs ITC dividend comes down to yield, durability and price: Coal India has paid Rs 26.50 a share over the last 12 months, a yield of about 6.4% to 6.6% at Rs 404 to Rs 413, with a payout near 47%, a P/E near 8 and a return on equity near 28%, while ITC paid Rs 14.50 for FY26, a yield of about 5.7% at Rs 256, with a payout near 74% and a P/E near 16. Coal India wins on yield and cover, since it pays less than half its profit, but its income is tied to coal demand and a government shareholder at about 61%, while ITC offers a defensive FMCG business and near-zero debt but falling profit after the cigarette excise hike and a stock that fell about 30% in FY26. A real dividend multiplier needs three things, a high and covered payout, stable or growing earnings and a price that does not fall, and neither stock scores perfectly, because Coal India’s price is cyclical and ITC’s earnings are shrinking. On Rs 1 lakh invested at today’s prices, the last-12-month payout is about Rs 6,500 from Coal India and about Rs 5,700 from ITC, my calculations, before tax.
Coal India vs ITC dividend is a popular comparison because both rank among India’s largest dividend payers, and both stocks are down, which pushed yields up. Coal India fell about 2% to the Rs 404 to Rs 413 area on 8 October, and ITC fell about 4% to Rs 254.70, near its 52-week low.
If you are weighing the Coal India vs ITC dividend choice for an income portfolio, this article covers the dividend numbers, how to read yield and payout, the Coal India and ITC cases, how Vedanta, Power Grid, Hindustan Zinc and ONGC compare, the dividend multiplier framework, the risks and what to watch.
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Coal India vs ITC Dividend: The Numbers Side by Side
| Measure | Coal India | ITC |
|---|---|---|
| Price on 8 October | About Rs 404 to Rs 413, down about 2% | About Rs 255 to Rs 256, down about 4% |
| Last-12-month dividends | Rs 26.50 a share | Rs 14.50 a share for FY26 |
| Dividend yield | About 6.4% to 6.6% | About 5.4% to 5.7% |
| Latest payouts | Rs 5.25 final on 4 September; Rs 5.50 interim on 31 July; Rs 5.50 on 18 February; Rs 10.25 on 4 November 2025 | Rs 8 final and Rs 6.50 interim in January 2026 |
| Payout ratio | About 47% | About 74% |
| P/E | About 8.2 times | About 16 to 17 times |
| Return on equity | About 28% | About 29% |
| Debt | Low; net cash business | Almost debt free |
| Market capitalisation | About Rs 2.5 lakh crore | About Rs 3.2 lakh crore |
| Largest shareholder | Government, about 61% | Institutions; no promoter |
The table shows why the Coal India vs ITC dividend debate has no simple winner: Coal India has the higher yield and lower payout, and ITC has the steadier brand but lower profit growth.
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How to Read Yield and Payout in Coal India vs ITC Dividend
- Yield equals the last 12 months’ dividends divided by the price, so it rises when the price falls.
- Payout ratio is the share of profit paid out; below 50% leaves room to keep paying if profit dips.
- Cover is how many times profit covers the dividend; Coal India covers it about 2 times and ITC about 1.3 times.
- Durability depends on earnings trend and cash flow, not on the yield number.
- Total return equals dividend plus price change, and a falling price can erase the yield in the Coal India vs ITC dividend contest.
In the Coal India vs ITC dividend comparison, ITC’s yield rose mainly because its price fell, which is the classic yield-trap check.
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The Case for Coal India in the Coal India vs ITC Dividend Debate
| Point | Detail |
|---|---|
| Yield and cover | About 6.5% with a payout near 47%, so profit covers the dividend about twice |
| Valuation | A P/E near 8 and a return on equity near 28% |
| Operations | September coal supplies rose 12.5% to 61.20 million tonnes; Q2 supplies were 186.04 million tonnes |
| Balance sheet | Low debt and a large cash position |
| Shareholder | A government holding of about 61% that favours steady dividends |
| Price record | The stock gained about 13% in FY26, per one comparison |
The risk in the Coal India vs ITC dividend choice is that Coal India’s profit follows coal prices, e-auction premiums and volumes, and that a government shareholder can also demand higher or lower payouts.
The Case for ITC in the Coal India vs ITC Dividend Debate
| Point | Detail |
|---|---|
| Dividend | Rs 14.50 for FY26 and a forward yield near 5.7% at Rs 256 |
| Business | Cigarettes with a legal-market share of about 75%, a growing FMCG business, paperboards and agri |
| Balance sheet | Almost no debt; return on equity near 29% |
| Earnings trend | Q1 FY27 profit fell about 16% after the February 2026 excise hike; cigarette segment profit fell 35% |
| Price record | The stock fell about 30% in FY26 and sits near its 52-week low |
| Valuation | A P/E near 16 and a payout near 74% |
The risk in the Coal India vs ITC dividend choice is that ITC’s profit is falling while its payout is already high, so dividend growth may stall until earnings recover.
Other Dividend Stocks Compared With Coal India vs ITC Dividend
| Stock | Yield (approximate) | Character |
|---|---|---|
| Vedanta | About 6% to 12%, variable | Multiple interim dividends; commodity-linked; first FY27 interim has a 14 October record date |
| Hindustan Zinc | Variable | Payout swings with zinc and silver prices |
| Power Grid | About 3.1% to 3.8% | Regulated returns and the steadiest growth |
| ONGC | About 5.6% | Tied to oil prices |
| Hindustan Petroleum | About 6.2% | Tied to refining margins |
These yields are from trackers and change daily, and they show that the highest yield is often the least predictable in the Coal India vs ITC dividend debate.
A Dividend Multiplier Framework: Coal India vs ITC Dividend
| Test | Coal India | ITC | Better on the test |
|---|---|---|---|
| Yield today | About 6.5% | About 5.7% | Coal India |
| Payout cover | About 2 times | About 1.3 times | Coal India |
| Earnings trend | Cyclical, supported by supply growth | Falling after the tax hike | Coal India for now |
| Business stability | Commodity and policy linked | Defensive FMCG with a long record | ITC |
| Price momentum | Down about 2% on the day, up in FY26 | Near the 52-week low | Coal India |
| Tax | Dividends taxed at slab rates for both | Same | Equal |
On these tests Coal India leads the Coal India vs ITC dividend comparison on numbers and ITC leads on business stability, so the choice depends on whether you value cover or defensiveness.
Risks Behind the Coal India vs ITC Dividend Choice
Yield trap: A falling price can make any yield look high, as ITC shows in the Coal India vs ITC dividend debate.
Cyclicality: Coal prices and demand can cut Coal India’s profit and payout, a key risk in the Coal India vs ITC dividend choice.
Policy and tax: Excise changes hit ITC, and government payout demands affect Coal India.
Price risk: A fall of 10% costs more than a year’s dividend of about 6% in the Coal India vs ITC dividend trade-off.
Tax on dividends: Dividends are taxable and may attract 10% TDS above Rs 10,000 a year.
What to Watch Next in Coal India vs ITC Dividend
- ITC’s Q2 results later in October, which will shape the Coal India vs ITC dividend comparison.
- Coal India’s Q2 results and any interim dividend announcement.
- Vedanta’s first interim dividend with the 14 October record date.
- Coal prices, e-auction premiums and power demand.
- Whether ITC holds Rs 254.65 and Coal India holds its recent range.
Conclusion
In the Coal India vs ITC dividend comparison, Coal India offers the higher yield of about 6.5% with a payout near 47%, while ITC offers about 5.7% with a defensive business but falling profit and a high payout. A real dividend multiplier needs a covered payout, stable earnings and a steady price, and neither stock meets all three today. Consult a SEBI-registered advisor before making any decision.
Disclaimer: Data and figures in this article are sourced from publicly available information. These may or may not be accurate. Please verify all data with the official NSE (nseindia.com) and BSE (bseindia.com) websites before making any investment decision. Investments in securities are subject to market risk. This content is for educational purposes only and is not investment advice by Univest (SEBI RA INH000013776).
Frequently Asked Questions
Which pays more, Coal India or ITC?
Ans. In the Coal India vs ITC dividend comparison, Coal India pays Rs 26.50 over 12 months, a yield of about 6.5%, against ITC’s Rs 14.50, about 5.7%.
What is the Coal India dividend yield?
Ans. About 6.4% to 6.6% on a price of Rs 404 to Rs 413, based on dividends of Rs 26.50 over the last 12 months.
What is the ITC dividend yield?
Ans. About 5.4% to 5.7% on Rs 14.50, which rose mainly because the price fell about 30% in FY26 and near-term profit is falling.
Which has the safer dividend?
Ans. In the Coal India vs ITC dividend contest, Coal India has the lower payout ratio of about 47%, while ITC has a more defensive business but a higher payout ratio of about 74% and falling profit.
What is a dividend multiplier?
Ans. A stock whose dividend is high, covered by earnings and growing, with a stable price, so income and total return compound together in the Coal India vs ITC dividend comparison.
Are Vedanta and Power Grid better?
Ans. Vedanta yields more but varies with commodity prices and debt, and Power Grid yields less but is steadier, so they suit different goals than the Coal India vs ITC dividend pair.
Are dividends taxable?
Ans. Yes. They are taxed at your slab rate, and 10% TDS may apply when dividends from a company exceed Rs 10,000 in a year.
Which should I buy, Coal India or ITC?
Ans. This article does not constitute investment advice. Consult a SEBI-registered financial advisor.
