In case Nvidia (NASDAQ:NVDA) wasn’t already popular with investors, the semiconductor giant is now attracting income seekers by increasing its quarterly dividend payments. The distributions still won’t be huge on a percentage basis, but Nvidia’s cash payouts will be a nice bonus for shareholders in the long run.
Nvidia made another big announcement alongside the dividend hike, which could confuse some investors. There is no cause for concern, however, as the upcoming changes will not diminish the incentive to buy and hold Nvidia stock.
A small return gets a big increase
Amid a slew of positive data for the first quarter of fiscal 2025, Nvidia’s dividend increase announcement may have been lost in the shuffle for some investors. Still, those raking in revenue shouldn’t downplay the importance of Nvidia’s upcoming quarterly dividend hike.
To recap the announcement, Nvidia will increase its quarterly dividend payout per share by 150%, from $0.04 to $0.10. There’s still time to get in, as Nvidia shareholders registered on June 11 will be paid on June 28 (although, depending on your broker, it may take a few extra days to see the cash payment appear in your account).
What about Nvidia’s stock split?
This is all pretty straightforward, but there’s another simultaneous announcement from Nvidia that could complicate things. Specifically, Nvidia is adopting a 10-for-1 forward stock split. If you are an Nvidia shareholder of record on June 6, you will receive nine additional Nvidia shares after the market close on June 7; negotiations on a split-adjusted basis will begin on June 10.
So, for example, Nvidia’s stock price could be reduced from around $1,160 to $116. What is certain, however, is that the increase in dividend payout will be $0.01 per share after the split, rather than $0.10 per share.
A cent per share per quarter doesn’t seem like much, and the annual amount eventually dividend yield will still be tiny (0.0034%). Still, at least the quarterly payout per share will be 150% better than the $0.004 it would have been, post-split, without Nvidia’s dividend hike.
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Model David has no position in any of the stocks mentioned. The Motley Fool Ranks and Recommends Nvidia. The Mad Motley has a disclosure policy.
What is the dividend payout for Nvidia stock? was originally published by The Motley Fool
