Ongc Dividend Policy - Pptx Presentation 5m3x3v
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ONGC DIVIDEND POLICY •Priyanka •Vaishali
Atri
Bhagat
•Rucha
Dave
•Vishva
Dave
•Amber
Maheshwari
•Drashty
Parikh
FLOW OF PRESENTATION o
o
o
o
o
Introduction of dividend Factors affecting dividend policy Significance and danger of dividend policy Forms of dividend policy Types of dividend policy
o
o o o o
o
o
Introduction of ONGC Dividend summary Dividend paid ONGC dividend policy How many times ONGC pays dividend in a year. Dividend Rate & Dividend Payout Ratio Conclusion
INTRODUCTION OF DIVIDEND Meaning: Dividend is that part of the profits of a company which is distributed amongst its shareholders. Definition: According to ICAI, "Dividend is a distribution to shareholders out of profits or reserves available for this purpose."
FACTORS AFFECTING DIVIDEND POLICY
1. 2.
There are mainly two factors affecting dividend policy: External factors. Internal factors.
1) EXTERNAL FACTORS AFFECTING DIVIDEND POLICY
General state of economy. State of capital market. Legal restrictions. Contractual restrictions.
2) INTERNAL FACTORS AFFECTING DIVIDEND POLICY
Desire of the shareholders. Financial needs of the company. Nature of earnings. Desire to retain the control of management. Liquidity position.
TYPES OF DIVIDEND POLICY Regular dividend policy Stable dividend policy 1. Constant dividend per share 2. Constant payout ratio 3. Stable rupee dividend plus extra dividend. Irregular dividend policy No dividend policy
FORMS OF DIVIDEND POLICY 1.
2. 3. 4.
Cash dividend Stock dividend Bond dividend Property dividend
INTRODUCTION OF ONGC
ONGC is India's leading oil & gas exploration company. produced more than 600 million metric tonnes of crude oil. India's highest profit making corporate. It has a share of 77 percent in India's crude oil production and 81 per cent in India's natural gas production. It has fully owned subsidiary, ONGC Videsh Ltd (OVL) that looks for exploration opportunities in other parts of the world. ONGC has also acquired 72% stake in MRPL with full management control of the 9.69 tonne, state-of-the-art refinery.
DIVIDEND SUMMARY For the year ending March 2012, Oil and Natural Gas Corporation has declared an equity dividend of 195.00% amounting to Rs 9.75 per share. At the current share price of Rs 299.85 this results in a dividend yield of 3.25%. The company has a good dividend track report and has consistently declared dividends for the last 5 years.
Announceme nt dates
Effective dates
Dividend type
Dividend remarks (%)
29-01-13
22-03-13
Interim
80.00
04-12-12
24-12-12
Interim
100.00
29-05-12
14-09-12
Final
40.00
Dividend per share Rs.4.0000 per share (80%) 2nd Interim Dividend Rs.5 per share (100%)Interim Dividend Rs.2 per share (40%)Final Dividend Rs.1.50 per share (30%)2Nd
15-02-12
19-03-12
Interim
30.00
02-12-11
06-01-12
Interim
125.00
31-05-11
18-08-11
Final
15.00
01-12-10
20-12-10
Interim
320.00
Special Interim Dividend
31-05-10
09-09-10
Final
150.00
-
30-11-09
22-12-09
Interim
180.00
-
25-06-09
11-09-09
Final
140.00
-
05-12-08
23-12-08
Interim
180.00
-
25-06-08
08-09-08
Final
140.00
AGM
Interim Dividend Rs.0.75 per share (15%)Final Dividend
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
2010 to
2009 to
2008 to
2007 to
2006 to
2005 to
2004 to
2003 to
2002 to
2001 to
2000 to
DIVIDEND PAID 31st
31st
31st
31st
31st
31st
31st
31st
31st
31st
31st
March,
March,
March,
March,
March,
March,
March
March
March
March
March
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
5
10
10
10
10
10
10
10
10
10
10
74,861
70,583
68,444
68,444
66,305
64,167
57,037
34,222
42,778
19,963
15,685
175%
330%
320%
320%
310%
450%
400%
240%
300%
140%
110%
39.56%
42.09%
42.44%
40.98%
42.39%
44.47%
43.90%
39.50%
40.60%
32.20%
30.00%
12,156
11,616
11,632
11,632
10,125
9,000
7,763
4,385
2,375
--
1,600
Face Value of equity shares (Rs. per share)
Dividend(
Rs. in millions) Dividend rate Dividend Payout Ratio Dividend tax(Rs. in millions)
PAT (RS. IN MILLION) Series 1 200,000
189,240
180,000 167,016 160,000
156,429
167,676 161,263
140,000 120,000 100,000
Series 1
80,000 60,000 40,000 20,000 0
2OO7
2008
2009
2010
2011
ONGC DIVIDEND POLICY Dividend Earning per share Book closure period Dividend payment date Dividend payout ratio
DIVIDEND POLICY
The policy a company uses to decide how much it will pay out to shareholders in dividends:
Factors to consider while deciding dividends: Future capital expenditure plans, profits earned during the financial year, cost of raising funds from alternate sources, cash flow position and applicable taxes including tax on dividends.
As per govt.’s guidelines, all profit-making PSUs in oil sector (like ONGC) should declare the higher of a minimum dividend of 30 % on equity or a minimum dividend payout of 30 % of post-tax profit.
Since company has maintained 40% payout ratio for last 10 years, it is safe to assume that same would be maintained in future too. Since great companies generally increase their earnings over years, it can be safely assumed that dividends would increase in years to come.
HOW MANY TIMES ONGC PAYS DIVIDEND IN A YEAR? In last 8 years, ONGC has paid dividends twice every year. Interim dividend (generally higher than final dividend) is paid in December. This is followed by Final Dividend paid in September.
DIVIDEND RATE & DIVIDEND PAYOUT RATIO Dividend rate (%)
Dividend payout ratio (%)
Regular dividend payer and this notion is validated by data Consistently paying dividends for more than 10 years. The table below shows the dividend rates (as % of face value). The great thing is that the dividends have been continuously increasing during the last 5 years.
A company with high dividend payout ratio can mean two things: Either the company has no future investment plans OR high dividend payouts are temporary (due to some asset sale) and hence not sustainable. maintained a very stable payout ratio of 40% i.e. it shares 40% of its earnings with investors as dividends. balancing its growth (investment) plans and wealth sharing objective on a consistent basis.
Dividend Rate (%)
↓
Dividend Payout ratio D
CONCLUSION
Consistent dividend policy Moderate but steady increase in dividend payment according to the profits declarations. Main advantage to shareholders is that they have stable dividend policy. Low fluctuation in dividend policy The highest dividend rate paid by the company is 450% in the year 2005-06 and the lowest was in year 2001-02 140%.
THANK YOU
Atri
Bhagat
•Rucha
Dave
•Vishva
Dave
•Amber
Maheshwari
•Drashty
Parikh
FLOW OF PRESENTATION o
o
o
o
o
Introduction of dividend Factors affecting dividend policy Significance and danger of dividend policy Forms of dividend policy Types of dividend policy
o
o o o o
o
o
Introduction of ONGC Dividend summary Dividend paid ONGC dividend policy How many times ONGC pays dividend in a year. Dividend Rate & Dividend Payout Ratio Conclusion
INTRODUCTION OF DIVIDEND Meaning: Dividend is that part of the profits of a company which is distributed amongst its shareholders. Definition: According to ICAI, "Dividend is a distribution to shareholders out of profits or reserves available for this purpose."
FACTORS AFFECTING DIVIDEND POLICY
1. 2.
There are mainly two factors affecting dividend policy: External factors. Internal factors.
1) EXTERNAL FACTORS AFFECTING DIVIDEND POLICY
General state of economy. State of capital market. Legal restrictions. Contractual restrictions.
2) INTERNAL FACTORS AFFECTING DIVIDEND POLICY
Desire of the shareholders. Financial needs of the company. Nature of earnings. Desire to retain the control of management. Liquidity position.
TYPES OF DIVIDEND POLICY Regular dividend policy Stable dividend policy 1. Constant dividend per share 2. Constant payout ratio 3. Stable rupee dividend plus extra dividend. Irregular dividend policy No dividend policy
FORMS OF DIVIDEND POLICY 1.
2. 3. 4.
Cash dividend Stock dividend Bond dividend Property dividend
INTRODUCTION OF ONGC
ONGC is India's leading oil & gas exploration company. produced more than 600 million metric tonnes of crude oil. India's highest profit making corporate. It has a share of 77 percent in India's crude oil production and 81 per cent in India's natural gas production. It has fully owned subsidiary, ONGC Videsh Ltd (OVL) that looks for exploration opportunities in other parts of the world. ONGC has also acquired 72% stake in MRPL with full management control of the 9.69 tonne, state-of-the-art refinery.
DIVIDEND SUMMARY For the year ending March 2012, Oil and Natural Gas Corporation has declared an equity dividend of 195.00% amounting to Rs 9.75 per share. At the current share price of Rs 299.85 this results in a dividend yield of 3.25%. The company has a good dividend track report and has consistently declared dividends for the last 5 years.
Announceme nt dates
Effective dates
Dividend type
Dividend remarks (%)
29-01-13
22-03-13
Interim
80.00
04-12-12
24-12-12
Interim
100.00
29-05-12
14-09-12
Final
40.00
Dividend per share Rs.4.0000 per share (80%) 2nd Interim Dividend Rs.5 per share (100%)Interim Dividend Rs.2 per share (40%)Final Dividend Rs.1.50 per share (30%)2Nd
15-02-12
19-03-12
Interim
30.00
02-12-11
06-01-12
Interim
125.00
31-05-11
18-08-11
Final
15.00
01-12-10
20-12-10
Interim
320.00
Special Interim Dividend
31-05-10
09-09-10
Final
150.00
-
30-11-09
22-12-09
Interim
180.00
-
25-06-09
11-09-09
Final
140.00
-
05-12-08
23-12-08
Interim
180.00
-
25-06-08
08-09-08
Final
140.00
AGM
Interim Dividend Rs.0.75 per share (15%)Final Dividend
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
1st April,
2010 to
2009 to
2008 to
2007 to
2006 to
2005 to
2004 to
2003 to
2002 to
2001 to
2000 to
DIVIDEND PAID 31st
31st
31st
31st
31st
31st
31st
31st
31st
31st
31st
March,
March,
March,
March,
March,
March,
March
March
March
March
March
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
5
10
10
10
10
10
10
10
10
10
10
74,861
70,583
68,444
68,444
66,305
64,167
57,037
34,222
42,778
19,963
15,685
175%
330%
320%
320%
310%
450%
400%
240%
300%
140%
110%
39.56%
42.09%
42.44%
40.98%
42.39%
44.47%
43.90%
39.50%
40.60%
32.20%
30.00%
12,156
11,616
11,632
11,632
10,125
9,000
7,763
4,385
2,375
--
1,600
Face Value of equity shares (Rs. per share)
Dividend(
Rs. in millions) Dividend rate Dividend Payout Ratio Dividend tax(Rs. in millions)
PAT (RS. IN MILLION) Series 1 200,000
189,240
180,000 167,016 160,000
156,429
167,676 161,263
140,000 120,000 100,000
Series 1
80,000 60,000 40,000 20,000 0
2OO7
2008
2009
2010
2011
ONGC DIVIDEND POLICY Dividend Earning per share Book closure period Dividend payment date Dividend payout ratio
DIVIDEND POLICY
The policy a company uses to decide how much it will pay out to shareholders in dividends:
Factors to consider while deciding dividends: Future capital expenditure plans, profits earned during the financial year, cost of raising funds from alternate sources, cash flow position and applicable taxes including tax on dividends.
As per govt.’s guidelines, all profit-making PSUs in oil sector (like ONGC) should declare the higher of a minimum dividend of 30 % on equity or a minimum dividend payout of 30 % of post-tax profit.
Since company has maintained 40% payout ratio for last 10 years, it is safe to assume that same would be maintained in future too. Since great companies generally increase their earnings over years, it can be safely assumed that dividends would increase in years to come.
HOW MANY TIMES ONGC PAYS DIVIDEND IN A YEAR? In last 8 years, ONGC has paid dividends twice every year. Interim dividend (generally higher than final dividend) is paid in December. This is followed by Final Dividend paid in September.
DIVIDEND RATE & DIVIDEND PAYOUT RATIO Dividend rate (%)
Dividend payout ratio (%)
Regular dividend payer and this notion is validated by data Consistently paying dividends for more than 10 years. The table below shows the dividend rates (as % of face value). The great thing is that the dividends have been continuously increasing during the last 5 years.
A company with high dividend payout ratio can mean two things: Either the company has no future investment plans OR high dividend payouts are temporary (due to some asset sale) and hence not sustainable. maintained a very stable payout ratio of 40% i.e. it shares 40% of its earnings with investors as dividends. balancing its growth (investment) plans and wealth sharing objective on a consistent basis.
Dividend Rate (%)
↓
Dividend Payout ratio D
CONCLUSION
Consistent dividend policy Moderate but steady increase in dividend payment according to the profits declarations. Main advantage to shareholders is that they have stable dividend policy. Low fluctuation in dividend policy The highest dividend rate paid by the company is 450% in the year 2005-06 and the lowest was in year 2001-02 140%.
THANK YOU
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