Dividend paying stock: Hindustan Zinc shares yield 15.5% in FY23. Beats PPF, FD return
Dividend paying stock: Hindustan Zinc shares traded ex-dividend on three occasions in current financial year
PremiumDividend paying stock: A long term investor enjoys some additional benefits over short term investors as listed companies reward their loyal shareholders from their capital reserves by announcing interim or final dividend, bonus shares, buyback of shares, etc. Sometimes, these rewards are normal but there are some dividend paying stocks that give dividend to an extent that it beats government-backed small saving schemes like Public Provident Fund (PPF) interest rate and bank fixed deposit interest rates.
To those who believe in claims when they are shown examples. They need to look at Hindustan Zinc shares. At the beginning of FY23, Hindustan Zinc share price was around ₹320 apiece and when the FY23 is about to end, it is quoting around ₹312 per share levels, means the stock has dropped ₹8 per share. However, in this time period, Hindustan Zinc shares have traded ex-dividend on three occasions, delivering net annual dividend of ₹49.50 per share. This means, net income of a Hindustan Zinc shareholder due to these three dividend stands at ₹41.50 per share.
Hindustan Zinc dividend history
As per the information available on BSE website, Hindustan Zinc share traded ex-dividend on 20th July 2022 for payment of ₹21 per share interim dividend. The state-owned dividend paying stock traded ex-dividend again on 23rd November 2022 for payment of ₹15.50 per share interim dividend. On 30th January 2023, Hindustan Zinc shares traded ex-dividend again for payment of ₹13 per share interim dividend. This means, Hindustan Zinc share has given total interim dividend of ₹49.50 ( ₹21 + ₹15.50 + ₹13) per share.
Hindustan Zinc dividend yield in FY23
If someone had bought Hindustan Zinc shares at the beginning of FY23, he or she would have got one share at ₹320. Hindustan Zinc share price today is around ₹312. This means, it has lost ₹8 per share but gained ₹49.50 per share through interim dividends. Hence, net income of the Hindustan Zinc shareholder in FY23 so far is 41.50 per share ( ₹49.50 - ₹8.00).
So, net dividend yield of Hindustan Zinc shares in FY23 is around 13 per cent. However, if we discard Hindustan Zinc share price depreciation during FY23, then net dividend yield of Hindustan Zinc in FY23 stands at around 15.50 per cent.
Hindustan Zinc dividend vs PPF vs bank FD return
Comparing these 13 per cent net return or 15.50 per cent dividend yield of Hindustan Zinc shares with PPF and bank FD return, we would come to know that PPF interest rate has remained at 7.10 per cent per annum payable on quarterly basis whereas bank FD return have surged from near 5 per cent to around 6 per cent. This means, Hindustan Zinc dividend yield is more than double of the PPF return and bank FD return in this said time.
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