3 Debt-Free Dividend Stocks with Strong Fundamentals to Watch in 2026

Investors often seek companies that blend stable dividends with a strong financial base. Here is a closer look at 3 virtually debt-free Indian companies consistently paying dividends up to FY25, making them notable for 2026 watchlists. 

Coal India: High Dividend with Minimal Debt 

Coal India Ltd., a public sector company and the world’s largest coal producer, recorded production of 781 million tonnes in FY25 and maintains a monopoly over 80% of India’s coal production.  

It began paying dividends in 2010 and has not missed since then. In FY25, it offered a dividend of ₹26.5 per share with a yield of 6.2%. Despite a dip in profits from ₹37,369 crore in FY24 to ₹35,302 crore in FY25, its dividend payout ratio moved up from 42.02% to 46.19%.  

The debt-to-equity ratio has been below 0.1 since FY22, showing a nearly debt-free balance sheet. 

Castrol India: Consistent Returns and Debt-Free Financials 

Castrol India Ltd., a small-cap known for automotive lubricants, has paid dividends consistently since 2000. The company posted a dividend of ₹13 in 2024 with a dividend payout ratio of 139%. This marked an increase from ₹7.5 and 86% in 2023.  

With a debt-equity ratio of just 0.04, the company has maintained financial strength. Castrol is expanding its offerings into EV fluids and cooling fluids for data centres, supporting diversification. 

Read More: Best Ethanol Stocks in India for January 2026: Triveni Engineering, Globus Spirits, EID Parry and More! 

ITC: Zero Leverage with Long-Term Dividend History 

ITC Ltd., an FMCG major, holds a dominant position in cigarettes and a wide range of sectors including agri-products and paperboards. It has paid dividends continuously for 25 years.  

In FY25, the dividend per share stood at ₹14.35, increasing from ₹10.75 in FY21. The company achieved this even as the dividend payout ratio declined from 101% in FY21 to 52% in FY25, due to profit growth.  

With a debt-equity ratio of 0.01 in FY25, the company runs on financially conservative principles while maintaining operational profitability. 

Conclusion 

Coal India, Castrol India, and ITC are examples of Indian companies that maintain low debt and pay consistent dividends. These traits make them stand out among listed companies that prioritise financial discipline while rewarding shareholders annually. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.