Niirlon ltd is it worth buying this stock for dividend value of 5000 Rs per year?
To evaluate whether it's worth buying Niirlon Ltd stock for a dividend value of ₹5,000 per year, we need to analyze the historical dividend data and make a projection for future dividends.
Given:
- Current stock price: ₹420
- Expected annual dividend value: ₹5,000
From the provided dividend history, we can observe the following:
- The company has been paying an interim dividend of ₹15 and a final dividend of ₹11 consistently for the past few years.
- The total dividend per share for the most recent year (2023-2024) is ₹15 (interim) + ₹11 (final) = ₹26.
To earn a dividend of ₹5,000 per year, you would need to hold:
Number of shares required = ₹5,000 / ₹26 = 192.31 shares (approximately)
The cost of buying 192.31 shares at the current price of ₹420 would be:
Cost of investment = 192.31 × ₹420 = ₹80,770.20
Now, let's evaluate if this investment is worth it:
Pros:
- The company has a consistent dividend payment history.
- The dividend yield (₹26 / ₹420 × 100%) is around 6.19%, which is relatively attractive.
Cons:
- The upfront investment of ₹80,770.20 is substantial.
- Future dividend payments are not guaranteed and may change based on the company's performance.
Overall, if you have the capital available and believe in the company's long-term prospects, investing in Niirlon Ltd for a dividend value of ₹5,000 per year could be a viable option. However, it's essential to consider your risk tolerance, investment goals, and diversification strategies before making any investment decision.
