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

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.

Updated: 8 Oct 2026 • 3:27 pm

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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

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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Table of Contents

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.