1:1 Bonus, 1:5 Split, 39 Dividends: Why Hindustan Zinc Is Good Dividend Yield Metal Stock To Buy For 2026?

Hindustan Zinc is a leading giant when it comes to the zinc industry. Backed by Vedanta Ltd., Hindustan Zinc has outperformed its parent, indices, and even benchmarks. Last week, HZL touched a new 52-week high and gained more than 68% from its 52-week low. HZL dominates the industry with a market cap of over Rs 2.69 lakh crore.

There is room for more buying, and Jefferies is the latest to like the stock. The global broker has recommended BUY as HZL looks to win big-time with the latest record rally in silver and its good dividend yield nature.

Hindustan Zinc Share Price:

Last week, on Friday, HZL share price closed at Rs 636.75 apiece on BSE, up by 1.90% with market cap of Rs 2,69,047.19 crore. During the trading session of December 26, the stock even touched a new 52-week high of Rs 646.00 apiece.

From the current price level, HZL stock has zoomed by 68.2% from its 52-week low of Rs 378.65 apiece. So far in 2025, the metal giant advanced by nearly 43.5%.

Why BUY Hindustan Zinc Stock?

Jefferies has initiated coverage on HZL with buy rating and target price of RS 660. It expects HZL's dividend yield to reach 4%.

According to Jefferies, HZ is a big beneficiary of rising silver and zinc prices with first-decile zinc mining cost.

The company is world's largest integrated zinc producer with 1.12mtpa refined metal capacity, and is among top-5 in silver with 800t capacity. Zinc and lead formed 62% of FY25 EBIT while silver contributed 38%. In zinc, HZ is in first-decile of mining and first-quartile of smelting cost curve.

It needs to be noted that silver has doubled in 2025. And HZL is expecting silver market to remain in deficit for the year. Jefferies believes silver rates could range between $56-60 in 2HFY26-FY28 (3-10% below spot). With HZ hedging 37% of its 2HFY26 silver volumes at $37, the full price benefit will come in FY27, providing a big EBITDA boost.

On the valuation, Jefferies analysts said, "We expect HZ's EPS to rise at strong 22%/29% in FY26/FY27, and then by 7% in FY28; our FY26-28 EPS are 9-31% above street. Despite recent rally, HZ stock has lagged most of its global zinc and precious metal peers CYTD. Its 9.2x FY27E EV/EBITDA is above last 10Y average of 7.3x, but justified by rising share of silver in EBIT. We initiate with Buy and Rs660 PT (at 10x Sep-27E EV/EBITDA), 22% upside incl 4% dividend yield. Key risks are lower silver/zinc prices and mine grades, mine renewals post 2030, and adverse related party event."

Hindustan Zinc Corporate Action:

HZL has a history of steady dividend payouts, while the company has delivered one bonus and split.

Bonus Issue: The metal company has delivered only one bonus issue. In March 2011, HZL has paid 1:1 bonus shares. This meant 1 free share against 1 existing share.

Stock Split: Meanwhile, HZL has split only once. In March 2011, the company subdivided its shares in the ratio of 1:5, where the face value has split from Rs 10 each to Rs 2 each.

Dividends: Since August 2003, the company paid about 39 dividends, as per Trendlyne data. In the last 12 months, the company distributed up to Rs 10 dividend per share. It has a dividend yield of 1.57%.

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