In today’s investment landscape, the buzzwords are artificial intelligence (AI), sustainable funds, and quantitative investing. Amid this modern frenzy, one of the oldest and most straightforward stock-picking strategies is often overlooked. However, this age-old method deserves a fresh appraisal. Despite the appeal of quick gains and high-growth stocks dominating the news, the consistent and dependable returns from dividend-paying companies have stood the test of time as a fundamental pillar for building long-term wealth. Dividend investing offers a distinct advantage with its steady cash flow over extended periods. This reliable approach not only ensures financial stability but also provides a psychological edge, as regular income can help mitigate market volatility. In this article, we shine a spotlight on Top 5 Dividend Stocks to Watch for August 2024. These stocks represent various sectors and boast a track record of consistent dividend payouts, making them highly appealing for long-term investors.
1. Britannia Industries
First on the list is Britannia Industries. The board of directors of FMCG major Britannia, on 3 May 2024, recommended a final dividend of 7,350% or Rs 73.5 per equity share for FY24 with a face value of Rs 1. Accordingly, the board has fixed 5 August 2024 as the record date for the final dividend. The company has declared 25 dividends since 2001. The five-year average dividend payout ratio stands at 92.3%. The dividend yield over the past five years has averaged 1.9%.
Britannia Industries’ Dividend History (2019-2023)
| Year | Dividend per share (Adj.) (Rs) | Dividend payout ratio (%) | Dividend Yield (%) |
|---|---|---|---|
| 2019 | 14.9 | 31.2 | 0.5 |
| 2020 | 34.9 | 60.4 | 1.3 |
| 2021 | 157.5 | 205 | 4.3 |
| 2022 | 56.5 | 89.8 | 1.8 |
| 2023 | 72 | 74.9 | 1.7 |
Britannia Industries is among India’s leading food companies and is a part of the Wadia Group, a reputed Indian business house. Its products are spread across multiple business segments, including biscuits, bread, cakes, rusk, dairy products, and salted snacks.
2. Eicher Motors
Next on the list is Eicher Motors. The company’s board at their meeting held on 10 May 2024 recommended 5,100% or Rs 51 per share for the FY24. The company has fixed 7 August 2024 as the record date for the same. Eicher Motors has declared 24 dividends since June 2001. In the past 12 months, Eicher Motors has declared an equity dividend amounting to Rs 37 per share. The five-year average dividend payout ratio stands at 21.4%. The dividend yield over the past five years has averaged 0.9%.
Eicher Motors’ Dividend History (2019-2023)
| Year | Dividend per share (Adj.) (Rs) | Dividend payout ratio (%) | Dividend Yield (%) |
|---|---|---|---|
| 2019 | 1.2 | 1.5 | 0.6 |
| 2020 | 1.3 | 1.9 | 1.0 |
| 2021 | 16.9 | 34.5 | 0.7 |
| 2022 | 20.9 | 34.2 | 0.9 |
| 2023 | 36.9 | 34.7 | 1.3 |
Eicher Motors is a company of the Eicher group in India, a leading player in the Indian automobile industry and the global leader in middleweight motorcycles. It is the owner of the iconic Royal Enfield brand, which is focused on mid-sized motorcycles (250-750 cc). Classic, Bullet, and Himalayan are some of the brands that come under its Royal Enfield brand. It is sold in 60+ countries globally. It also provides protective riding apparel, urban casual wear, and motorcycle accessories and parts.
3. Maruti Suzuki
Next on the list is Maruti Suzuki. The board of Maruti Suzuki India Ltd. on 26 April 2024 approved a final dividend of 2,500% or Rs 125 per share for FY24. This is the highest dividend the company has paid since listing. The record date for the same is fixed as 2 August 2024. Before this, Maruti declared a final dividend of Rs 90 per share in August last year, followed by a Rs 60 final dividend in August 2022. Maruti Suzuki India has declared 21 dividends since July 2004. The five-year average dividend payout ratio stands at 34.9%. The dividend yield over the past five years has averaged 1%.
Maruti Suzuki’s Dividend History (2019-2023)
| Year | Dividend per share (Adj.) (Rs) | Dividend payout ratio (%) | Dividend Yield (%) |
|---|---|---|---|
| 2019 | 76.9 | 31.6 | 1.2 |
| 2020 | 57.7 | 31.9 | 1.4 |
| 2021 | 43.2 | 31.0 | 0.7 |
| 2022 | 57.7 | 46.7 | 0.8 |
| 2023 | 86.5 | 33.1 | 1.1 |
Maruti Suzuki is a subsidiary of Japan’s Suzuki Motor Corporation. It’s India’s largest passenger vehicle company. It primarily manufactures passenger and commercial vehicles. The company also offers spare parts and accessories, vehicle financing, and insurance through its subsidiaries.
4. Hero MotoCorp
The company on 8 May 2024 declared a final dividend of 2,000% or Rs 40 per equity share for the financial year 2024. Accordingly, the board has fixed 2 August 2024 as the record date for payment of the dividend. Apart from this, the board of directors on 9 February 2024, declared an interim dividend of 3,750%, amounting to Rs 75 per equity share, alongside a special dividend of 1,250%, equivalent to Rs 25 per equity share. This announcement brings the overall interim dividend for the financial year 2023-24 to an impressive Rs 140 per equity share. In the last five years, Hero MotoCorp has consistently made dividend payments. It has declared a total of 40 dividends since 2001. The five-year average dividend payout ratio stands at 64.7%. The dividend yield over the past five years has averaged 4.2%.
Hero MotoCorp’s Dividend History (2019-2023)
| Year | Dividend per share (Adj.) (Rs) | Dividend payout ratio (%) | Dividend Yield (%) |
|---|---|---|---|
| 2019 | 86.9 | 51.0 | 3.4 |
| 2020 | 89.9 | 49.6 | 5.6 |
| 2021 | 104.9 | 70.3 | 3.6 |
| 2022 | 94.9 | 81.5 | 4.1 |
| 2023 | 99.9 | 71.4 | 4.3 |
Hero MotoCorp, formerly known as Hero Honda, is an Indian motorcycle and scooter manufacturing company. It is the largest two-wheeler manufacturer in the world. It holds 37% of the share in the two-wheeler category.
5. Divi’s Laboratories
Last on the list is Divi’s Laboratories. The board of the large-cap recommended a final dividend of 1,500% or Rs 30 per equity share of the face value of Rs 2 each for the financial year 2023-24. The record date for the purpose of the payment of dividends is 2 August 2024. Divi’s Laboratories has declared 22 dividends since August 2003. The five-year average dividend payout ratio stands at 31.9%. The dividend yield over the past five years has averaged 0.8%.
Divi’s Laboratories’ Dividend History (2019-2023)
| Year | Dividend per share (Adj.) (Rs) | Dividend payout ratio (%) | Dividend Yield (%) |
|---|---|---|---|
| 2019 | 16.0 | 31.4 | 0.9 |
| 2020 | 16.0 | 30.9 | 0.8 |
| 2021 | 20.0 | 26.8 | 0.6 |
| 2022 | 30.0 | 26.9 | 0.7 |
| 2023 | 30.0 | 43.7 | 1.1 |
Divi’s Lab is a leading manufacturer of active pharmaceutical ingredients (API), intermediates, and registered starting materials in India. The company has been operating for more than thirty years in Hyderabad, India. It’s among the top pharmaceutical companies in the country.
Concluding Remarks
Dividend-paying stocks usually pay a dividend at a growing rate
. This increases the amount of passive income every year. Dividends also act as a defensive strategy during market downturns, as they exhibit more stability compared to non-dividend-paying stocks. While dividend stocks can provide a level of defensiveness, they are not immune to market fluctuations. They can still experience declines in value during severe market downturns or company-specific challenges. Thus, it’s essential to conduct thorough research, assess the financial health of the company, and diversify your investment portfolio.
Additional Tips for Dividend Investing
When investing in dividend stocks, consider the following:
- Dividend Yield: Look for stocks with a dividend yield that is sustainable and not excessively high.
- Payout Ratio: A lower payout ratio indicates that the company retains more earnings for growth.
- Dividend History: Companies with a long history of consistent dividend payments are generally more reliable.
- Sector Diversification: Diversify across different sectors to reduce risk.
- Growth Potential: Invest in companies with strong growth potential and solid financial health.
By incorporating these factors into your investment strategy, you can build a robust portfolio that provides steady income and potential for long-term capital appreciation.
