This Indian tech company is paying out a 450% dividend in October

Now before I come to this Indian tech company that is paying out a big dividend next month, I want to share this with you (only because you are interested in dividend stocks)…

Recently, we covered a detailed editorial on two high dividend paying companies – Vedanta and NALCO.

Here’s an excerpt of what we wrote:

While dividend investing is an evergreen strategy in the stock markets and will continue to prevail in the years to come, it is more relevant in the current environment where uncertainty is ruling the stock market.

Investing in a stable dividend-paying company will let you sleep peacefully at night. The business will generate a steady passive income. The more stable the business, the higher the share of profits that can be distributed.

Don’t just think of dividends as a source of income. They provide stability to your portfolio and can even offer higher returns in the long-term.

You can read the entire editorial here – Vedanta or NALCO – Which is the Better Dividend Stock?

Now, you might be wondering why we’re kicking off this article by talking about dividend stocks. We have good reason to do so…

When uncertainty is ruling markets, dividends come as a safety net to cushion your portfolio.

That is why you need to keep track of the companies that are paying out high dividends. One such company which has announced to pay a dividend next month is Accelya Solutions.

A word about the company

Accelya Solutions India (formerly Accelya Kale) is a software solutions provider to the global airline and travel industry.

The company has a large global footprint with operations spread across 11 countries. It accounts for and manages more than 5 billion financial transactions and 75 million tons of cargo annually. It caters to more than 250 airline customers, travel agents, and shippers worldwide.

The company partners with airlines right from the time a ticket or an airway bill is issued, all the way through its entire life cycle until the data is converted into actionable decision support.

It derives a large chunk of its revenues from the airline vertical, which makes it a big beneficiary as the economy reopens.

With strategic partnerships and alliances with established associations, the company caters to niche segments.

A rich history of dividends

For the year ended June 2022, the company has declared two dividends (one interim and one final).

In February this year, Accelya declared an interim dividend of ₹17 per share which was paid out to shareholders who had the stock in their portfolio as of 4 February 2022.

On 3 August 2022, the company declared a final dividend to the tune of ₹45 per share (450% on face value).

The record date for payout of the final dividend is 10 October 2022. The stock will trade ex-dividend on 6 October 2022.

Combined with the interim dividend, the total dividend for financial year 2021-22 comes to ₹62 per share.

Accelya has a rich history of paying out big dividends. Take a look at the table below which shows its dividend history.

What about finances?

The company reported a significant de-growth last year due to a significant decline in airline passenger traffic volumes due to pandemic induced restrictions.

As most of the company’s revenue is principally based on per transaction pricing, the revenue linked to airline passenger transaction was impacted.

However, as the economy reopened and recovered, so did the fortunes for Accelya Solutions.

Take a look at the financial performance of Accelya for the past five years.

The company does not have any debt on its books and has a debt to equity ratio of 0 for several years now.

How has Accelya Performed on the Bourses?

Over the past one year, share price of Accelya Solutions has fallen by 15%. On a YTD basis, the share price is up 5%.

Accelya share price has seen an uptrend in recent months as the Indian stock markets recovered.

The company has a 52-week high of ₹1,456 touched on 14 October last year. It has a 52-week low of ₹832 touched on 20 June 2022.

The company trades at a PE multiple of 21.9 times which is lower than the industry PE of 26. Its price to book value (PB) stands at 6.3, also a tad lower than the industry PB of 6.7.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from equitymaster.com

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