5 Stocks to Watch Out for Big Upcoming Dividends

Over the years, dividends have been a passive source of income for investors.

Companies pay dividends 1 to 4 times a year. The frequency of pay-out varies for each company.

The dividend amounts are based on the company's profit. In the case of excess cashflow generation, sometimes the company pays a special dividend.

These dividend pay-outs reduce the uncertainty of return. Due to this, they act as a potential wealth compounders, and can generate good income along with capital appreciation.

Here are 5 upcoming dividend stocks to add to your watchlist.

#1 Abbott India

Abbott India is engaged in the discovery, development, manufacturing, and market innovation of products and services in the pharma sector.

It is one of the largest and fastest-growing MNCs in the pharma sector.

It is a subsidiary of Abbott Laboratories with a 75% stake in it.

It offers products under various brands such as Similac, PediaSure, and Ensure.

The company offers a variety of products in diagnostics, medical devices, nutrition products, and branded generic medicines.

It possesses over 15 products which are the market leaders in their respective therapy segments. It recently added herbal supplies and menopause products into its therapy portfolio.

The company has rewarded its shareholders 26 times with dividends since 1996.

The five-year average payout ratio for the company stands at 61.4% whereas the average dividend yield stands at 1.3%.

For the financial year 2022, the board declared a final dividend of Rs 145 per share and a special dividend of Rs 130 per share. The effective date for both the dividend payment is 2 August 2022.

To know more about the company, check out Abbott India's financial factsheet and latest quarterly results.

Abbott India Dividend History

	Mar-17	Mar-18	Mar-19	Mar-20	Mar-21
Dividend per share (Adj.) (Rs)	40	55	65	250	275
Dividend payout ratio (%)	30.7	29.1	30.7	89.6	84.6
Dividend Yield (EoY) (%)	0.7	0.7	0.4	0.7	0.62

Source: Equitymaster

#2 MRF Ltd

MRF is India's largest tyre manufacturer.

The company manufactures a variety of rubber products. This includes tyres, tubes, conveyor belts and toys.

The company has declared 70 dividends since 2000.

The five-year average dividend payout ratio of the company is 2.5%. The dividend yield over the past five years has been 0.12%.

The company, in February 2022, paid an interim dividend of 30%, which was Rs 3 per share.

It has further declared a final dividend of Rs 144 per share, which is 1,440%.

The effective date for the payment is 27 July 2022.

To know more about the company, check out MRF's financial factsheet and latest quarterly results.

MRF Dividend History

	Mar-17	Mar-18	Mar-19	Mar-20	Mar-21
Dividend per share (Adj.) (Rs)	60	60	60	100	100
Dividend payout ratio (%)	1.7	2.2	2.3	3	3.3
Dividend Yield (EoY) (%)	0.1	0.1	0.1	0.2	0.1

Source: Equitymaster

#3 Bosch India

Bosch is a top provider of goods and services in energy and building technology, consumer goods, industrial technology, and mobility solutions.

The company is the Indian subsidiary of the German company Bosch.

In India, the company operates in four business sectors: Industrial Technology, Mobility Solutions, Consumer Goods, and Energy and Building Technology.

It manufactures and trades in a diverse range of products and services, from diesel and gasoline fuel injection systems to security systems.

The company has declared a total of 27 dividends since 2001.

The five-year dividend payout average of the company is 37.7% whereas the five year average dividend yield is 0.8%.

For the financial year 2022, the board declared a final dividend of Rs 110 per share.

The company also announced a special dividend of Rs 100 per share to mark the 100th anniversary of Bosch in India,

The effective date of the dividend payment is 14 July 2022.

To know more about the company, check out Bosch's financial factsheet and latest quarterly results.

Bosch Dividend History

	Mar-17	Mar-18	Mar-19	Mar-20	Mar-21
Dividend per share (Adj.) (Rs)	170.8	103.4	105	105	115
Dividend payout ratio (%)	28.9	22.3	19.4	47.7	70.6
Dividend Yield (EoY) (%)	0.7	0.6	0.6	1.1	0.8

Source: Equitymaster

#4 Hero MotoCorp

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.

The company is about to enter India's EV (Electric Vehicle) space with the brand Vida.

The company has declared 36 dividends since 2001.

Its five-year average dividend payout ratio stands at 55% whereas the five year dividend yield stands at 3.5%.

The company, in February 2022, declared an interim dividend of 3,000% or Rs 60 per share.

For the year, it declared a final dividend of 1,750% or Rs 35 per share. The Record date for the dividend payment is 27 July 2022.

To know more about the company, check out Hero MotoCorp's financial factsheet and latest quarterly results.

Hero MotoCorp Dividend History

	Mar-17	Mar-18	Mar-19	Mar-20	Mar-21
Dividend per share (Adj.) (Rs)	84.9	94.9	86.9	89.9	104.9
Dividend payout ratio (%)	52.6	51.7	51	49.6	70.3
Dividend Yield (EoY) (%)	2.6	2.7	3.4	5.6	3.6

Source: Equitymaster

#5 Larsen and Toubro

Larsen and Toubro is a multinational conglomerate company in India. It has business interests in engineering, construction, manufacturing, and many more.

L&T is among the top five construction giants in the world.

The company carries out projects in different segments such as nuclear, defence manufacturing, and urban infrastructure. The company has recently entered the green hydrogen market in India.

The company has distributed a total of 27 dividends since 2001.

The five-year dividend payout ratio of the company stands at 28.5%.

The five-year average yield of the company is 1.7%.

The board has declared the 1,100% final dividend for the year-end 2022 of Rs 22 per share.

The continued increase in the dividend payout is due to an increase in the number of projects by the company.

To know more about the company, check out Larsen and Toubro's financial factsheet and latest quarterly results.

Larsen and Toubro's Dividend History

	Mar-17	Mar-18	Mar-19	Mar-20	Mar-21
Dividend per share (Adj.) (Rs)	13.9	15.9	17.9	17.9	35.9
Dividend payout ratio (%)	28.5	26.6	24.7	23.3	39.2
Dividend Yield (EoY) (%)	1.3	1.2	1.3	2.2	2.5

Source: Equitymaster

Why you should invest in dividend stock

Fundamentally strong long-term companies usually pay a dividend at a growing rate. This increases the amount of passive income every year.

Further, dividend-paying stocks help by acting as a hedge against inflation and market volatility.

In 2022, markets have experienced turmoil due to inflation and rising interest rates. Dividend-paying stocks are a good place to hedge against this volatility.

If you are interested in investing in dividend stocks, you should look into the company's history of dividend payments and their value before investing.

Also, if you want to dwell deeper, use Equitymaster's stock screener to check high dividend yield stocks and the best-divided stock to buy.

We have also covered editorials on 5 penny stocks with good dividend yields and 5 Indian companies with over 7% in dividend yield.

You can further refer to Equitymaster's small cap guru, Richa Agarwal video on dividend multibaggers 2022.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...