Dividend paying Vedanta stock yields 20% in FY23. Beats PPF, EPF, bank FD, equity mutual fund returns

Vedanta dividend history

As mentioned above, Vedanta shares traded ex-dividend on four occasions after the beginning of FY2022-23. Vedanta shares first traded ex-dividend on 6th May 2022 for payment of interim dividend of ₹31.50 per share. Later, on 26th July 2022, Vedanta shares traded ex-dividend for payment of ₹19.50 per share interim dividend to its eligible shareholders. Likewise, Vedanta stocks traded ex-dividend on 29th November 2022 and 3rd February 2023 for the payment of ₹17.50 and ₹12.50 per share interim dividends respectively. So, metal major dividend paying stock has given away ₹81 per share dividend to its long term shareholders ( ₹312.50 + ₹19.50 + ₹17.50 + ₹12.50).

Annual dividend yield

Vedanta share price at the beginning of April 2022 was around ₹405 apiece. So, net dividend yield of Vedanta shares in FY23 comes at 20 per cent [( ₹81 / ₹405) x 100].

Beats PPF, EPF, bank FD and long term equity MF return

If we compare this 20 per cent annual yield of Vedanta dividend, then we would find that the metal stock has given more than double of the returns that a risk-free debt option like PPF (Public Provident Fund), Employees’ Provident Fund (EPF), bank fixed deposit (FD) interest rates. In fact, a long term equity mutual fund investor expect 12 per cent return on one’s money and this 20 per cent dividend yield by Vedanta is much higher than the expected equity mutual fund return by an investor in long term perspective.

PPF interest rate has remained stagnant at 7.10 per cent per annum, which is payable on quarterly basis. Similarly, EPF interest rate have remained at 8.10 per cent in FY23 whereas bank FD rates have surged from around 5.50 per cent to around 6.50 per cent in FY2022-23. Hence, Vedanta dividend yield of 20 per cent in FY23 has beaten the return given by PPF, EPF, bank FD and most of the equity mutual funds’ return in this time.