3900% Dividend in FY23: High Dividend Paying FMCG Stock Hits New 52-Week High; Should You Accumulate?

Leading FMCG player, Colgate Palmolive's stock price touched a new 52-week high on Friday and gained by nearly 3% on BSE. Colgate stock is on a winning streak for the second consecutive day. It has rallied by nearly 9.5% in 2 days. The stock accelerated after posting double-digit growth in both net profit and revenue for the first quarter of FY24. Overall, the company's Q1 was healthy. But did you know that Colgate is among high-paying dividend stocks with a whopping 3,900% dividend payout in FY23?

At the time of writing, Colgate's share price traded at Rs 2039.90 apiece, up by Rs 36.25 or 1.81% on BSE. The stock zoomed to touch a new 52-week high of Rs 2061.55 apiece in the first half of the trading session.

Colgate has been on a gaining spree since it declared Q1 earnings for FY24. On Thursday, the stock rallied by more than 6% to end at Rs 2003.65 apiece.

Since July 26 to date, the stock has risen by nearly 9.5% on the BSE. However, the stock is moving to an upside of 11% for the current week. Colgate's monthly upside is nearly 21%, while the half-yearly gain is over 40.5% as of now.

In Q1FY24, the company posted a consolidated net profit of Rs 273.68 crore, registering a growth of 30.5% YoY. While revenue from operations jumped by 10.7% YoY to Rs 1,314.73 crore. The healthy quarter was driven by strong quarter-on-quarter sales growth and improvement across profitability ratios.

The company's domestic sales climbed by 12.3% compared to the same quarter of last year, while toothpaste sales recorded high double-digit growth.

Colgate sees early signs of recovery in rural markets and remains optimistic about continued improvement.

Colgate recently paid the final dividend of 2100% for FY23. Overall, in the financial year 2022-23, the dividend payout was 3900% or Rs 39 per share.

Religare Broking has recommended accumulating this FMCG stock.

In its report, Religare Broking said, "Colgate continues to be the leader in the oral care segment and going forward its strategy is to drive growth by investing in core, driving premiumization and innovation in the oral care segment and building Palmolive portfolio. In addition, using science-based technology for products, support from its parent and focus on increasing brand recall value by spending on advertisements bodes well. We remain positive on the growth prospects and have estimated its Revenue/EBITDA/PAT to grow at a 6.7%/10.3%/10.8% CAGR of FY23-25E and are revising our rating to Accumulate from Buy earlier but maintaining the same target price of Rs 2,126."

At the current market price, Colgate has a dividend yield of 1.93%.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns. in advises users to consult with certified experts before making any investment decision.