Rs 100/Share Dividend: Smallcap Stock To Trade Ex-Dividend On August 2; Are Dividend Stocks Worth Buying?

Dividends are incentives or in simple words 'rewards' that are offered by listed companies at regular intervals. The firms pay dividends from their financial year profits to their shareholders who have invested in their equity shares on exchanges. Dividend stocks have their pros and cons, and it makes one wonder if it is worth buying just for the sake of earning dividends. That being said, Indian-based pressure cookers and cookware manufacturer, Hawkins Cookers is set to turn ex-dividend next week for a dividend payout of 1000%. Hawkins is among high dividend-paying stocks and has journeyed from trading below Rs 50 to nearly Rs 6,750 on BSE. It has skyrocketed by over 14,247% in less than 3 decades.

As per the regulatory filing, Hawkins Cookers have recommended a dividend of Rs 100 per equity share having a face value of Rs 10 each for the financial year 2022-23. It said, "The dividend if approved at the AGM, will be payable to those Members whose names appear in the Company's Register of Members on August 2, 2023."

In percentage terms, the dividend payout is 1000%.

Hence, August 2 is the record date to determine eligible shareholders for the dividend benefit. On the same day, the stock will turn ex-dividend.

Hawkins plans to pay its 1000% dividend for FY23 by latest September 8, 2023. The dividend is subject to shareholders approval at the ensuing g 63rd Annual General Meeting (AGM) scheduled on August 9, 2023.

On August 9, the company will also present its financial results for the quarter ended June 30, 2023.

As per Trendlyne data, Hawkins has declared 22 dividends since July 9, 2001.

In financial year FY22, the company paid a dividend of Rs 150 or 1500%, while in FY21, the dividend payout was 800% aggregating to Rs 80 per share.

Over the last 5 years, Hawkins' average dividend payout is 820% aggregating to Rs 82 per share.

On Friday, Hawkins shares closed at Rs 6633.70 apiece down by 0.62% on BSE. Overall, the stock ended the trading week from July 24th to 28th on a dull note with a marginal drop on BSE.

At the current market price, its dividend yield is at 1.6%.

Nevertheless, Hawkins' share price has risen by nearly 21% in a year. The stock has also emerged as multibagger with a nearly 145% upside in 5-years. But in a long-term perspective, the stock has given behemoth returns. Since July 1995, the stock has skyrocketed by a huge Rs 6,623.51 or 14,247.17% on BSE.

Does that mean dividend stocks are worth buying?

According to Motilal Oswal's blog, in the stock market, stocks of companies that offer dividends at regular intervals are termed dividend stocks. These entities usually have a long history of being in business and are fundamentally very strong. They also command a much higher share price compared to other companies and are mostly in the mid-cap and large-cap segment in terms of market capitalization.

However, the brokerage added that since dividend stocks have already established a strong foothold in their business, the future growth prospects are usually slim. The share price of such stocks tends to be quite stable and offers little wealth creation opportunity.

Thereby, the brokerage's note said, that dividend stocks are great investment options for individuals who're looking for a steady source of income from the stock market with a relatively low amount of investment risk.

Should you buy Hawkins Cookers?

9 analysts have recommended 'Buy' on Hawkins Cookers taking into consideration the current moving averages, while 3 analysts recommended 'Sell', as per Investing.com. Further, taking into account the stock's technical indicators, the majority have recommended 'Buy'.

Also, Trendlyne.com's poll showed that 74.07% have recommended 'Buy' on Hawkins Cookersm while 11.11% have recommended 'Hold' and 14.81% suggested selling.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor 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.