5 Penny Stocks to Watch Out for Upcoming Dividends in August 2024

Are you on the lookout for high-yielding investments? Look no further than stocks set to pay big dividends soon.

Recently, we wrote about the top stocks set to pay dividends in August 2024. Today, we'll focus on penny stocks.

While penny stocks may seem risky, there are some companies which maintain their dividend payout ratios and have strong financials to back them.

As investors search for reliable sources of income in uncertainty, we've scoured the market to bring you the penny stocks that are set to make their dividend payouts soon.

Take a look...

#1 Menon Pistons

First on this list is Menon Pistons.

The company is engaged in manufacturing components such as pistons, gudgeon pins, rings, and auto shafts for commercial vehicles, tractors, passenger cars, and heavy-duty vehicles.

Apart from supplying original equipment manufacturers (OEM), the company also has strong aftermarket sales, which fetches better margins.

In the last few years, the company acquired Lunar Enterprise and Rapid Machining Technologies for Rs 280 million to expand its product offering and increase its manufacturing capacity.

Despite investing in acquisitions, the company has managed to remain debt-free.

In the last five years, the revenue and net profit have grown at a CAGR of 10% and 18.2%, respectively, primarily driven by higher volumes and lower interest costs.

Menon Pistons pays consistent dividends to its shareholders.

The company is gearing up to make another big payout with its record date set as 5 August 2024, i.e. today.

It had declared a 100% dividend on its face value of Rs 1.

The current dividend yield stands at 1.1%.

Menon Pistons Dividend History

Year End	Mar-22	Mar-23	Mar-24
Face value (Rs)	1	1	1
Dividend (%)	75	100	100
Dividend per share (Unadj.) (Rs)	0.75	1	1
Dividend per share (Adj.) (Rs)	0.75	1	1
Dividend payout ratio (%)	20.3	21.9	19.3
Dividend yield (eoy) (%)	1.5	2.5	1.1

Source: Equitymaster

Going forward, the growing demand for automobiles will drive the company's revenue and net profit in the medium term.

To know more, check out Menon Pistons' financial factsheet and latest quarterly results.

#2 Infibeam Avenues

Next on the list is Infibeam Avenues.

Incorporated in 2017, Infibeam Avenues is in the business of software development services, maintenance, web development, payment gateway services, ecommerce, and other ancillary services.

The company's main aim at present is to emerge as a key player in the AI-based fraud detection and prevention market.

It has made an investment of more than Rs 1 bn by creating a new AI Hub, as an extension to its GIFT city hub.

Coming to dividends, Infibeam is all set to pay a dividend of 5% on its face value on 7 August 2024.

Infibeam Dividend History

Year End	Mar-20	Mar-21	Mar-22	Mar-23	Mar-24
Face value (Rs)	1	1	1	1	1
Dividend (%)	10	5	5	5	5
Dividend per share (Unadj.) (Rs)	0.1	0.05	0.05	0.05	0.05
Dividend per share (Adj.) (Rs)	0.02	0.02	0.05	0.05	0.05
Dividend payout ratio (%)	6	9.5	16	9.8	8.9
Dividend yield (eoy) (%)	0.3	0.1	0.3	0.4	0.1

Source: Equitymaster

While the dividend history is not so rich or commendable, the company has strong growth prospects. Going by the way its share price is moving these days, Infibeam Avenue is gearing up for a big move as the fintech space garners attention.

Recently, the company acquired a 54% stake in Rediff.com.

Infibeam Avenues provides digital payment gateway (CCAvenue), enterprise software platforms, and AI solutions to various businesses and government entities.

The company recently also released its Q1FY25 earnings. In the June 2024 quarter, the company reported a consolidated net profit of Rs 504 million, up 59% from Rs 316 million reported in Q1FY24.

Earnings got a boost amid rising use of digital payments and also a surge in the company's merchant base due to the increased use of digital POS products- CCAvenue TapPay amongst merchants.

As the fintech space evolves, Infibeam looks prepared and it's taking the acquisition route by acquiring smaller companies.

To know more, check out Infibeam Avenues financial factsheet and its latest quarterly results.

#3 Motherson Sumi Wiring

Next on the list is Motherson Sumi Wiring.

A joint venture between Sumitomo Wiring System and Motherson Group, Motherson Sumi Wiring is a market leader in the Indian wiring harness industry with a market share of over 40%.

The company was set up in FY22 as a result of the reorganization of Samvardhana Motherson International wherein the automotive wiring harness business for Indian OEMs was demerged from the parent company.

The company was listed in April 2022 at Rs 46 per share and it currently trades at Rs 73 per share.

Coming to its dividend, Motherson Sumi is set to pay out the final dividend for FY24 on 14 August 2024.

Back in July 2024, it had announced to pay 80% final dividend on its face value of Rs 1 (Rs 0.8 per share).

Here's a table showing its dividend history -

Year End	Mar-21	Mar-22	Mar-23
Face value (Rs)	1	1	1
Dividend (%)	0	85	65
Dividend per share (Unadj.) (Rs)	0	0.85	0.65
Dividend per share (Adj.) (Rs)	0	0.61	0.65
Dividend payout ratio (%)	0	65.4	59
Dividend yield (eoy) (%)	0	1.3	1.3

Source: Equitymaster

Motherson Sumi Wiring is a debt-free company and serves high growth industries including all powertrain requirements (ICE, electric, and hybrid among others).

Last year, the company spent almost Rs 2 bn as part of the capex towards capacity enhancement.

While it derives majority of revenue from a single product, its dominant market position could still help improve profitability going forward.

As of June 2024, promoters of the company hold 61% in the company while FIIs and mutual funds hold 11% and 14%, respectively.

In FY24, the company's revenue saw an 18% YoY growth and reached Rs 8,300 crores, compared to Rs 7,000 crores in FY23.

The growth was backed by healthy demand in the Indian automotive industry.

As part of its expansion plans, the company has planned a capex of Rs 200 crores in FY25.

The company is also in the process to set up 2 new facilities, which are expected to be operational starting early Q2FY25.

To know more, check out the company's detailed financials here.

#4 Equitas Small Finance Bank

Next on the list is Equitas Small Finance Bank (SFB).

Equitas Small Finance Bank is a small finance bank founded in 2016 as a microfinance lender.

The bank has its headquarters in Chennai and is a subsidiary of holding company Equitas Holdings.

Equitas SFB is all set to make the dividend payout of Rs 1 per share (10% of its face value) on 9 August 2024.

Here's a table showing its dividend history over the years -

Year End	Mar-19	Mar-20	Mar-21	Mar-22	Mar-23
Face value (Rs)	10	10	10	10	10
Dividend (%)	0	0	0	0	10
Dividend per share (Unadj.) (Rs)	0	0	0	0	1
Dividend per share (Adj.) (Rs)	0	0	0	0	0.98
Dividend payout ratio (%)	0	0	0	0	19.4
Dividend yield (eoy) (%)	0	0	0	0	1.5

Source: Equitymaster

Shares of the company have fallen from the peak in the past one month owing to weak Q1 results.

In Q1FY25, Equitas Small Finance Bank reported an 87% year-on-year (YoY) drop in net profit to Rs 260 million (m). This decline was due to a five-fold increase in provisions and contingencies.

Provisions for the quarter were Rs 3 billion (bn), up from Rs 1.1 bn in the March quarter, and just Rs 60 million (m) in the same period last year.

During the period under review the bank allocated Rs 1.8 bn as floating provisions, increasing its provision coverage ratio to 70.3% from 56.1% three months ago.

As part of its growth strategy, Equitas Small Finance Bank is focusing on several strategic initiatives. The bank plans to consolidate its loan origination systems for personal loans and credit cards onto a single platform.

The bank is nearing completion of its super app.

Additionally, a revamped loan origination system for small business loans (SBL) and affordable housing finance (AHF) has been launched.

For more details, you can have a look at Equitas Small Finance Bank fact sheet.

#5 Hindcon Chemicals

Last on the list is Hindcon Chemicals.

The company is a leading manufacturer of construction chemicals and cement additives in India.

It manufactures a comprehensive range of cement additives, including plasticisers and superplasticisers.

Hindcon Chemicals is nearing its dividend payout date next week on 13 August 2024.

In May 2024, the company announced to pay 5% dividend on its face value of Rs 2.

Here's a table showing the company's dividend history over the year -

Year End	Mar-19	Mar-20	Mar-21	Mar-22	Mar-23
Face value (Rs)	10	10	10	10	10
Dividend (%)	6	9	15	17	0
Dividend per share (Unadj.) (Rs)	0.12	0.18	0.3	0.34	0
Dividend per share (Adj.) (Rs)	0.02	0.03	0.04	0.05	0
Dividend payout ratio (%)	3.2	4.8	4.8	6.1	0
Dividend yield (eoy) (%)	2.7	8.2	6.2	2.4	0

Source: Equitymaster

Hindcon Chemicals is a micro-cap manufacturing industrial chemicals like sodium silicate and cement additives, which is used in infra and water treatment sectors.

In FY24, the company's net profit came in at Rs 62.3 million compared to Rs 43.6 million in the year ago period. This, even as the company's revenue in the said period.

Going forward, the company aims to strengthen its position as a leading construction chemicals manufacturer by continuously innovating and developing new products.

For more details, check out Hindcon Chemicals' fact sheet.

Other Penny Stocks Paying Dividend in August 2024

Apart from the above, here are some more penny stocks to track for upcoming dividends in August 2024.

• Patel Integrated Logistics
• Motherson Sumi Wiring
• Real Estate
• KK Shah Hospitals
• Compucom Software
• South India Bank
• Snowman Logistics
• Lancor Holdings

If you are on the lookout for more such companies, look no further than Equitymaster's Powerful Stock Screener.

This screener allows you to screen stocks based on both pre-set queries and your own criteria.

Here are some of the popular screens:

• Best Indian Penny Stocks with Dividend Growth
• High Dividend Yield Penny Stocks in India

Happy Investing.

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...