2 Bonus, 35 Dividends, 2.7% Yield: Power-house NBFC Coming Up With New Rewards Soon; Should You BUY?

REC Ltd is a power-house NBFC that is at the heart of financing and promoting power projects across India. REC Ltd is not just funding power projects, its significant performance on stock exchanges has also been fruitful for investors. So far, REC has paid 2 bonuses, and a massive 35 dividends, while holding a healthy dividend yield of 2.7%. And there is more to come because REC is all set to announce new rewards for investors on March 16.

The new perks will be in the form of interim dividends.

REC Ltd Share Price:

REC's share price ended at Rs 472.70 apiece, up by 0.7% on BSE with a market cap of Rs 1,24,472.50 crore.

The stock is closing its gap towards its 52-week high of Rs 524 apiece while trading higher by 317.76% from its 52-week low of Rs 113.15 apiece.

In a year, REC shares have gained by 280% on BSE, while in 5-years, the upside is over 341.5%.

REC Ltd Upcoming Dividend:

The company's board of directors are scheduled to meet on Saturday, March 16, 2024, inter alia to consider the proposal for declaration of 3,d Interim Dividend, if any, for the financial year 2023-24.

Further, the company said, the trading window will remain closed for trading in REC's equity shares and listed debt securities (tax-free bonds etc.) from March 6, 2024, to March 18, 2024, and a trading window will open with effect from March 19, 2024. During the said closure period, all designated persons and their immediate relatives have been advised not to deal in REC's enquiry shares/securities.

This will be the first dividend announcement in 2024. In the last year, REC paid up to 141% dividends amounting to Rs 14.1 per share. Of the total, there was also a dividend payout of Rs 12.6 per share or 126% for FY24.

On the current market price, REC Ltd's dividend yield is at 2.66%.

As per Trendlyne data, since September 8, 2008, REC has delivered 35 dividends to its shareholders.

REC Ltd Bonus Shares:

Apart from dividends, REC has also delivered bonus shares on two occasions in 2016 and 2022.

The first bonus was of a 1:1 ratio, effective from September 28, 2016. The second was a 1:3 bonus ratio, effective from August 17, 2022.

Should You Buy REL Share Price?

CLSA has recommended Buy on REC Ltd for a target price of Rs 560 per share. The outlook is positive.

About REC Ltd:

REC is a 'Maharatna' company under the administrative control of the Ministry of Power, Government of India, and is registered with RBI as a Non-Banking Finance Company (NBFC), Public Financial Institution (PFI) and Infrastructure Financing Company (IFC).

REC has evolved and expanded its financing mandate to cover the entire Power-Infrastructure sector comprising Generation, Transmission, Distribution, Renewable Energy and new technologies like Electric Vehicles, Battery Storage, Green Hydrogen etc. More recently REC has also diversified into the Non-Power Infrastructure sector comprising Roads & Expressways, Metro Rail, Airports, IT Communication, Social and Commercial Infrastructure (Educational Institutions, Hospitals), Ports and Electro-Mechanical (E&M) works in respect of various other sectors like Steel, Refinery, etc.

REC provides long-term loans and other financing products to State, Centre and Private Companies for the creation of infrastructure assets in the country.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.