Dividend King Stock: Nestle Is Back With Yet Another Dividend For 2023, Announce Stock Split Too

FMCG giant Nestle India is among the top stocks when it comes to rewarding shareholders with dividend benefits. The Maggi maker is back with yet another dividend payout for 2023, after paying the first interim dividend of Rs 27 per share for the year. Not just that Nestle plans to make its shares affordable for investors and hence it has announced a stock split. The two proposals will be considered in a board meeting scheduled on October 19 when it will announce its Q3 results for the year.

In its regulatory filing on October 3rd, Nestle said, "The Board of Directors will also consider the following proposals:

- declaration of the second interim dividend for the year 2023, if any....Second interim dividend for the year 2023, in the case declared, shall be paid on and from 16th November 2023; and

- alteration in the share capital of the Company by sub-division/ split of existing equity shares having face value of Rs 10/- each, fully paid up, as may be determined by the Board of Directors."

The company's board will consider these two proposals on October 19 when it will announce its third quarter and nine months that ended September 30, 2023, results.

For the second interim dividend, Nestle has already fixed a record date on November 1 to determine eligible shareholders for the benefits. The paid-up value is nearly Rs 96.5 crore.

Further details on the second interim dividends and stock split will be known on October 19.

Nestle follows a calendar year for its financial earnings. Last year, the company paid a hefty dividend of 2200% amounting to Rs 220 per share.

Continuing on its dividend benefits in 2023 as well, Nestle has already paid a first interim dividend of Rs 27 per share for the current year.

As per Trendlyne data, Nestle has announced a whopping 67 dividends since May 2001. On the current market price, the company's dividend yield is at 0.99%.

In the second quarter of 2023, the company earned a net profit of Rs 698.3 crore, while its total sales stood at Rs 4,619.5 crore. The company's sales total sales growth was at 15%, while on the domestic market alone, the growth came in at 14.6%. The company witnessed robust double-digit growth across verticals including Maggi Noodles, Beverages, confectionary, and prepared dishes.

On BSE, Nestle shares stood at Rs 22,338.15 apiece, down by 0.7% on Tuesday with a market cap of over Rs 2.15 lakh crore.

Last month, in its research note, Axis Direct said, "We remain positive on Nestle as it consistently delivered resilient performance led by 1) Efforts towards rural penetration and market share gains through the RURBAN strategy, 2) Constant focus on innovation (launching 110+ products in the last seven years), 3) Premiumisation in the core categories, 4) Entry into new categories of the future (Purina Pet care and Gerber's for toddlers), and 5) Introduction of D2C platform to gauge consumer attention."

"We recommend a BUY rating on the stock with a near-term TP of Rs 24,100," the brokerage added. This implies a nearly 8% upside ahead in Nestle shares.

Nestle India manufactures and markets a wide range of food and beverage products including milk and milk products, coffee, tea, noodles, chocolates, confectionery, and infant nutrition. Some of its popular brands in India include Maggi, Nescafe, KitKat, MilkyBar, and Nestle every day. Furthermore, it recently acquired Purina Petcare to enter into the pet care business and launched Gerber Cereals to drive the premiumisation agenda. The company operates a robust distribution network (5.1 Mn outlets) that covers both urban and rural areas of India.

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