What is the dividend payout for Nvidia?

Nvidia's dividend payout might surprise you.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Nvidia (NASDAQ: NVDA) remains one of the hottest artificial intelligence (AI) stocks on the market. But did you know that the company also pays a dividend? And something strange happened to that dividend earlier this year.

Nvidia made a surprising dividend change in 2024

Many profitable companies that experience rapid sales growth opt to boost their dividend payments over time. At first glance, the opposite seems true for Nvidia.

In 2020, the company paid a quarterly dividend of $0.16 per share. In 2021, the payout was lowered to $0.04 per share. In early 2024, it was lowered again to just $0.01 per share per quarter. All of this has brought Nvidia's dividend yield down to just 0.02%, with a payout ratio of merely 1% of Nvidia's bottom-line earnings.

But these numbers don't reflect the company's stock splits, which can artificially disguise a rising dividend. Earlier this year, for example, the company enacted a 10-for-1 stock split. Adjusted for this stock split, the current $0.01-per-share quarterly dividend is really equivalent to $0.10 per share on a pre-split basis -- more than double the previous dividend payout. The same was also true in 2020 when the company split its shares 4 for 1.

NVDA Dividend Yield Chart

NVDA Dividend Yield data by YCharts

Of course, Nvidia isn't struggling financially. Since 2020, shares have risen in value by more than 1,000%, buoyed by a massive surge in demand for AI GPUs -- a segment of the market in which Nvidia maintains a market share of 70% to 95%. Profits have skyrocketed due to this demand.

So while the dividend rate actually has been rising when adjusting for stock splits, it has been completely overshadowed by an even bigger increase in earnings, causing the payout ratio to fall dramatically.

In summary, Nvidia very much remains a growth stock, not an income stock. But don't let the top-line numbers fool you -- Nvidia continues to up its dividend rate, a reality somewhat masked by massive stock splits.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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