NTPC stock could gain from dividend yield, earnings lift

ET Intelligence Group: A dividend yield of 4.5 per cent could support NTPC’s stock, which has seen a sharp fall over the past few months. The stock of India’s largest power producer was considered a defensive bet in uncertain times, given its steady business and high earnings visibility.

However, the recent government announcement to sell up to 10 per cent stake, followed by weak June quarter performance, had led its stock to plummet 18 per cent in the past two months. The company paid dividend per share of Rs 4.5 last year and is expected to give Rs 5.33 this year, according to Bloomberg estimates. This results in a 4.5 per cent dividend yield for FY20. NTPCNSE 0.21 % spent Rs 27,000 crore in capex last year and similar capex is expected in FY20 as well.