ITC A GOOD DIVIDEND YEILDING STOCK

 ITC ltd.,which was earlier known as Imperial Tobacco Company, started as a cigarettes manufacturing company with brands like Goldflake, Flake, Classic under its banner. It has expanded into education and stationery products, hospitality, paperboards and packaging, among others. Acquisition of Sunrise Foods Pvt Ltd is expected to strengthen its market position in the spices segment and further improve diversity.

A strong brand, a wide product portfolio, an established distribution network, and robust research and development capability have enabled the company to consolidate its position as the leader in the Indian cigarettes market. 

The strong brand loyalty of cigarette smokers is reflected in the sustained market share and profitability over the years, notwithstanding the increase in duties. Healthy internal cash accrual, low debt, and robust liquidity have strengthened the financial risk profile. ITC has an operating margin of 34.5%. The company has zero debt, against a large tangible net worth of over Rs 60,347 crore. Over the past 10 years the company has maintained a dividend payout of over 50%, currently yielding to 5.19%. Its dividend track record has been high and consistent making it a very good dividend bet. 

If you are already a shareholder in ITC or any other dividend paying company then you may be committing a major mistake of not reinvesting the dividend. You must reinvest your dividend if you are looking for better returns over inc