Top 5 EV Stocks Which Pay Good Dividends

The electric vehicle (EV) revolution has gained significant momentum in many countries around the world, and India is no exception.

With each passing day, EV companies are making headlines, indicating their increasing prominence and acceptance in the nation.

As the world gradually shifts towards green and renewable fuel, the EV market and stocks making significant strides in the space are poised to experience growth in the coming years.

EV stocks have been among the best-performing stocks worldwide in the past year.

But what makes an EV stock even more interesting is if it pays big dividends. Not only do investors get the option to benefit from the potential growth, they also have the opportunity to receive regular income through dividend payments.

This combination of growth potential and consistent dividends can provide a compelling investment proposition.

If you're looking for dividend-paying EV stocks, don't miss out on these top 5 companies.

#1 Hero MotoCorp

Leading the list is Hero MotoCorp.

The world's largest manufacturer of two-wheelers has made significant progress in the electric vehicles (EVs) space. The group has launched a range of electric scooters, including the Hero Electric Optima and Hero Electric Photon, which offer eco-friendly and efficient mobility solutions.

Coming to dividends, Hero MotoCorp has announced a dividend of Rs 35 per equity share for the financial year 2023. The record date for the same is 28 July 2023.

In the last five years, Hero MotoCorp has consistently paid out big dividends.

The five-year average dividend payout ratio stands at 60.6%. The dividend yield over the past five years has averaged 3.9%. That's more than good for a bluechip company.

Hero MotoCorp Dividend History

	Mar-18	Mar-19	Mar-20	Mar-21	Mar-22
Dividend per share (Adj.) * (Rs)	94.9	86.9	89.9	104.9	94.9
Dividend payout ratio (%)	51.7	51	49.6	70.3	81.5
Dividend Yield (%)	2.7	3.4	5.6	3.6	4.1

*Adjusted for bonus issues and stock splits
Data Source: Equitymaster

The company has already announced its 'electrified' plans to roll out the electric brand VIDA across India to cover 100 cities in 2023.

While Hero MotoCorp has leadership in the budget bike segment (100-110 cc), it's looking to enhance its presence in the 125 cc and also drives in models to bring in volumes and focus on the premium segment bikes with power ranging between 150 cc and 450 cc.

In a strategic move, Hero MotoCorp invested in Ather Energy, an EV startup renowned for its electric scooters and charging infrastructure. This partnership is aimed to leverage Ather Energy's expertise to support Hero MotoCorp's EV initiatives.

Additionally, Hero MotoCorp has been actively investing in research and development for EVs, establishing the Hero Tech Center Germany GmbH, which focuses on developing electric powertrains and advanced technologies for future mobility solutions.

The company is also exploring opportunities for an extensive charging stations network to support the growing demand for EVs in India.

For more details, see the Hero MotoCorp's financial factsheet and latest quarterly results.

#2 Graphite India

Second on the list is Graphite India.

Graphite India is engaged in the manufacturing and marketing of graphite electrodes, graphite equipment, and carbon products.

For the financial year 2023, the company has declared a dividend of Rs 10 or 500% on the face value of Rs 2 per share. The record date for the same is 26 July 2023.

Graphite India has remained a consistent dividend payer over the years. Since year 2000, the company has declared 26 dividends.

The dividend yield over the past five years has averaged 4.2%.

Graphite India Dividend History

	Mar-18	Mar-19	Mar-20	Mar-21	Mar-22
Dividend per share (Adj.) * (Rs)	17	55	2	5	10
Dividend payout ratio (%)	32.2	31.6	86.9	-304.5	38.7
Dividend Yield (%)	2.3	12.3	1.6	1	2

*Adjusted for bonus issues and stock splits
Data Source: Equitymaster

Going forward, Graphite India aims to expand its market share and enhance its global presence. The company intends to increase its foothold in the international market by leveraging its strengths and improving outreach efforts.

Graphite India is one of the leading graphite electrode manufacturers globally. Graphite electrodes are used in electric arc furnaces for steel production.

Graphite electrodes play a crucial role in steel production, as they are used in electric arc furnaces to melt scrap steel and other raw materials.

The molten steel produced is then used for manufacturing various components of electric vehicles, such as the chassis, body structure, and battery enclosures.

For more details, see the Graphite India company fact sheet and quarterly results.

#3 HEG

Third on the list is HEG.

Like Graphite, HEG is a leading graphite electrode manufacturer in India. It has one of the largest integrated graphite electrode plants in the world, processing sophisticated UHP (Ultra High Power) Electrodes.

HEG is well-positioned to benefit from the growth of the EV market. Graphite is a key component in lithium-ion batteries, which are used in EVs.

For the financial year 2023, the company's board has declared a final dividend of Rs 40 per share or 400% on the face value of Rs 10 per share. The dividend will be paid on or before 30 September 2023.

HEG has remained a consistent dividend payer. Since 2010, the company has declared 28 dividends.

The five-year average dividend payout ratio stands at 38.4%. The dividend yield over the past five years has averaged 2.9%.

HEG Dividend History

	Mar-18	Mar-19	Mar-20	Mar-21	Mar-22
Dividend per share (Adj.) * (Rs)	82.8	80	25	3	40
Dividend payout ratio (%)	29.6	10.1	180.8	-64.5	35.8
Dividend Yield (%)	2.5	3.8	5.2	0.2	2.9

*Adjusted for bonus issues and stock splits
Data Source: Equitymaster

To meet the growing demand for graphite, HEG plans to invest Rs 10 billion (bn) into a new manufacturing facility for graphite anode. The new facility will have a production capacity of 20,000 metric tonnes per year.

The investment in the new graphite anode facility is part of HEG's strategy to become a leading materials supplier for the EV market. The company is also planning to invest in research and development to develop new products and applications for graphite.

The company exports over 70% of its production to more than 30 countries.

For more details, see the HEG company fact sheet and quarterly results.

#4 Fiem Industries

Fourth on the list is Fiem Industries.

Fiem Industries is a leading manufacturer of automotive components in India. The company has been in business for over 50 years and has a strong presence in the automotive lighting, signalling equipment, rearview mirrors, sheet metal, and plastic parts markets.

Fiem Industries is a leading manufacturer of electrical components for the automotive industry.

The company's board recommended a final dividend of Rs 30 per equity share for FY23. The payout translates to 300% against the face value. The record date for the same is 26 July 2023.

The company has maintained a good record of paying dividends and has consistently declared dividends for the last five years. Since 2007, the company has declared 20 dividends.

The five-year average dividend payout ratio stands at 28.9%. The dividend yield over the past five years has averaged 2.7%.

Fiem Industries Dividend History

	Mar-18	Mar-19	Mar-20	Mar-21	Mar-22
Dividend per share (Adj.) * (Rs)	9	12	13	16	20
Dividend payout ratio (%)	22.5	27.9	21.7	44.9	27.6
Dividend Yield (%)	1	2.3	5.2	2.9	2.2

*Adjusted for bonus issues and stock splits
Data Source: Equitymaster

In 2023, Fiem Industries plans to expand its EV product portfolio and increase its market share.

The company has already signed a memorandum of understanding (MoU) with Gogoro India, a Taiwanese battery swapping company, to develop and supply battery management systems for electric scooters.

Fiem Industries is also investing in new manufacturing facilities to meet the growing demand for EV components. The company plans to set up a new plant in Gujarat, India, which will focus on the production of EV chargers and battery packs.

In recent years, Fiem has been expanding its presence in the EV space. The company has developed a range of EV components, including LED headlights, taillights, turn signals, and charging ports.

Fiem is also working on developing new EV technologies, such as battery management systems and electric motors.

For more details, see the Fiem Industries company fact sheet and quarterly results.

#5 Exide Industries

Last on the list is Exide Industries.

Exide Industries is an India-based storage battery company. The company's segments include Storage batteries and allied products.

The company manufactures storage batteries for the automotive, industrial, and submarine sectors.

In 2018, the company forayed into lithium-ion batteries and started catering to the EV market. By the financial year 2021, it started manufacturing cells in India, which it previously sourced from abroad.

The company offers a range of EV batteries that cater to different vehicle types and applications.

Exide Industries, on 8 May 2023, announced a final dividend of Rs 2 per equity share of the face value of Re 1 each, a 200% payout on the face value.

The said dividend is subject to the approval of the shareholders at the ensuing 76th Annual General Meeting (AGM).

The record date for the same will be announced post the board meeting on 8 August 2023. It has declared a total of 34 dividends since 2002.

The five-year average dividend payout ratio of Exide Industries stands at 29.3%. The dividend yield over the past five years has averaged 1.5%.

Exide Industries Dividend History

	Mar-18	Mar-19	Mar-20	Mar-21	Mar-22
Dividend per share (Adj.) * (Rs)	2.4	2.4	4.1	2	2
Dividend payout ratio (%)	29.4	24.1	45.7	23.2	24.5
Dividend Yield (%)	1.1	1.1	1.3	1.1	1.3

*Adjusted for bonus issues and stock splits
Data Source: Equitymaster

The company is setting up a green-field plant to manufacture Lithium-ion batteries. Earlier, it announced that the first phase of the plant (6 gigawatt-hour) will entail an investment of around Rs 40 bn.

With this project on track, it's looking forward to becoming one of the leading domestic players offering state-of-the-art products and solutions in the fast-growing electric mobility space and stationary space.

Additionally, the company has established strategic partnerships and collaborations, such as its alliance with Leclanche, to bolster its presence in the EV sector.

For more details, see the Exide Industries company fact sheet and quarterly results.

To conclude...

The future of EVs looks bright and it's driven by a combination of factors including increasing global demand for sustainable transportation solutions, and strong government support.

In India, the government has set an ambitious target of achieving 30% electric vehicles on the roads by 2030. To accomplish this goal, the government has introduced several policies and incentives.

Furthermore, the government has implemented subsidies on EV batteries as part of the Union Budget 2023. This move specifically focuses on reducing the cost of production for EV manufacturers by providing financial support for lithium-ion cells.

All being said, the stock market is a tricky place. Any change in policy related to EVs or incidents of EVs catching fire in bulk, could change the entire sentiment.

That is why it's important to conduct thorough research and analysis before making investment decisions.

If you want to dig deeper, use Equitymaster's stock screener to check high dividend yield stocks and the best dividend stocks to buy.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...