PSU-Backed Multibagger Stock With Higher Dividend Yield Than IT Majors Set to Announce Dividend; Consistent Payout History Makes It a Must-Watch!

Starting from Rs 7 per share in FY2020-21, dividend payout has surged to Rs 47 per share in FY2024-25.

Ask anyone today about building wealth or securing their savings, and chances are, mutual funds will feature prominently in the conversation. They have become a trusted gateway to both savings and investing. Speaking of mutual funds, do you know which company launched India’s first equity mutual fund? It was UTI Mutual Fund, managed by UTI Asset Management Company (AMC), the listed company that manages a wide range of mutual fund schemes for Indian investors.

UTI AMC was listed back in 2020. The company debuted at a price of Rs 500 on NSE against a final issue price of Rs 554. Fast forward to 2025, the stock price has more than doubled to Rs 1,074 on NSE. It even registered an all-time high of Rs 1,403 on NSE in December 2024.

For shareholders, wealth creation typically comes from two key avenues: the appreciation in stock price and the dividend received over time.  Looking at the first aspect – appreciation in the stock price, the stock has delivered mutlibagger returns. To complement this return, the dividend payout, which has been growing year-on-year, acts as a cherry on the top. In short, the company ticks both boxes.  

The chart below shows the year-on-year growth in the dividend payout of UTI AMC

Note: Dividends are reflected as per the payment date, not the announcement date.  

Starting from Rs 7 per share in FY2020-21, UTI AMC’s dividend payout has surged to Rs 47 per share in FY2024-25. 

Talking about the dividend yield – it is a financial ratio that measures the amount of cash dividends paid out to shareholders relative to the market price of the share. It is expressed as a percentage and is calculated by dividing the annual dividend per share by the current market price of the stock. In simple terms, dividend yield tells you how much dividend income you are earning compared to the current price of the stock. The dividend yield is 4.37 per cent, based on the prevailing market price of Rs 1,075 per share.

The chart above highlights the rise in UTI AMC’s dividend yield over the past three years. Dividend yield stood at 2.79 per cent three years ago, improved to 3.21 per cent, and further climbed to 4.37 per cent. Now, the most interesting aspect of the story, the Board meeting of UTI AMC has been scheduled on Tuesday, April 29, 2025 to consider recommendation of a dividend along with the results for the quarter and financial year ending March 31, 2025.

With a consistent dividend track record, all eyes will be on the upcoming board meeting for the dividend announcement, as well as on how the company has performed in Q4FY25 and for the full year 2025. To put things in perspective, a dividend yield of 4.37 per cent is quite attractive. Why do we say that? Even IT stocks, which are traditionally known for their generous dividend payouts and decent yields, lag behind the dividend yield offered by UTI AMC.  

The table below compared the dividend yields of several companies. UTI AMC offers the highest dividend yield at 4.37 per cent. Among the IT stocks, HCL Technologies leads with a dividend yield of 3.80 per cent, followed by TCS at 3.60 per cent and Infosys at 3.31 per cent. Tech Mahindra and Oracle Financial Services Software (OFSS) have relatively lower but still respectable dividend yields of 2.94 per cent and 2.79 per cent, respectively. Overall, the data highlights UTI AMC’s standout position in terms of dividend returns.

An interesting insight to note is that UTI AMC is backed by some of India’s leading PSU – State Bank of India, Punjab National Bank, Bank of Baroda, and Life Insurance Corporation of India. For those seeking for a stock with trusted backing and an attractive, steadily rising dividend yield, UTI AMC is certainly worth keeping on the radar. 

Disclaimer: The article is for informational purposes only and not investment advice.