ITC Has Paid Dividends Worth Rs 90 Per Share Since 2020. Should You Buy?
ITC Limited, the diversified conglomerate known for its cigarettes, hotels, and FMCG products, has once again rewarded its shareholders. The company recently announced a final dividend of Rs 8 per share for the financial year 2025-26. This latest payout brings the total dividend distribution per share since 2020 to an impressive Rs 90.5. For investors looking for steady income, this track record raises an important question: is ITC stock a good buy right now?
Understanding ITC’s Dividend History
ITC has a long and consistent history of sharing profits with its shareholders. Since the year 2001, the company has issued a total of 32 dividend payouts. This includes both interim dividends paid during the year and final dividends approved at the annual general meeting. The latest Rs 8 per share final dividend is subject to approval at the company’s upcoming AGM. If approved, it will add to an already strong payout record.
To put this in perspective, an investor who held one share of ITC since early 2020 would have received Rs 90.5 in total dividends over the last five years. This amount does not include any potential capital gains from the rise in share price. It is purely the cash returned to shareholders.
What Does a 4.71% Yield Mean for You?
Currently, ITC offers a dividend yield of about 4.71%. Dividend yield is calculated by dividing the annual dividend per share by the current stock price. For example, if ITC’s share price is around Rs 450, an annual dividend of Rs 21.2 would give a yield of roughly 4.71%. This is significantly higher than the average yield offered by many fixed-income options like bank fixed deposits or government bonds.
For a general investor, a 4.71% yield means that for every Rs 1,00,000 invested in ITC shares, you could expect to receive about Rs 4,710 in dividends each year, assuming the company maintains its payout. This makes ITC an attractive option for income-focused investors, especially retirees or those looking for regular cash flow.
Background: Why ITC Can Pay High Dividends
ITC’s ability to pay consistent and high dividends comes from its strong cash flow. The company operates in multiple sectors. Its cigarette business remains a major profit generator. At the same time, its FMCG division, which includes brands like Aashirvaad, Sunfeast, and Bingo, is growing steadily. The hotels business is also recovering well after the pandemic. This diversification helps ITC generate steady profits even in tough economic times.
Moreover, ITC has a conservative debt profile. It does not need to borrow heavily to pay dividends. Instead, it uses its own profits. The company’s board follows a clear dividend policy. They aim to return a significant portion of profits to shareholders while keeping enough capital for future growth.
Should You Buy ITC Stock for Dividends?
Buying ITC solely for its dividend yield can be a good strategy, but it comes with risks. First, dividends are not guaranteed. They depend on company profits and board decisions. If ITC’s profits fall in future years, the dividend amount could be reduced. Second, stock prices can go down. If you buy ITC at a high price and the market falls, you could lose more in capital than you gain in dividends.
However, for long-term investors who can hold through market ups and downs, ITC offers a reliable income stream. The company has a strong brand portfolio and a wide distribution network. Its FMCG business is gaining market share. The hotels segment is also expanding. These factors support future profit growth, which in turn supports future dividends.
Examples of Dividend Investing with ITC
Consider an investor who bought 100 shares of ITC in early 2020 at around Rs 200 per share. Their total investment would have been Rs 20,000. Over the next five years, they would have received Rs 9,050 in dividends alone. That is a return of over 45% just from dividends, not counting any increase in share price. Today, the same shares would be worth much more, giving both income and capital gains.
Another example: a retiree looking for monthly income could buy ITC shares and receive dividends twice a year. While the payout is not monthly, the total annual income can supplement pension or other fixed income. This makes ITC a popular choice in many dividend-focused portfolios.
Final Thoughts
ITC’s dividend record since 2020 is strong. The total payout of Rs 90.5 per share shows the company’s commitment to shareholders. With a current yield of 4.71%, it offers better income than many safe investments. However, buying any stock involves risk. You should consider your own financial goals, risk tolerance, and investment horizon. If you are looking for steady income and can hold for the long term, ITC could be a good addition to your portfolio. But always do your own research or consult a financial advisor before making a decision.
