The record CSL dividend is being paid today. Here's the lowdown

Today is a good day to be a CSL Limited (ASX: CSL) shareholder.

That's because later today the biotherapeutics company will be rewarding them with its biggest ever dividend.

Payday for the CSL dividend

In August, CSL released its FY 2023 results. For the 12 months ended 30 June, the company's revenue increased a sizeable 31% in constant currency to US$13.31 billion. This was driven by growth across the business, as well as the benefit of an 11-month contribution from the new CSL Vifor business.

CSL's bottom line grew almost as quickly as its top line. The company reported net profit after tax before amortisation (NPATA) growth of 20% in constant currency to US$2.86 billion. This was actually ahead of management's guidance range of US$2.7 billion to US$2.8 billion.

This ultimately allowed the CSL board to declare a final dividend of US$1.29 per share, which brought it full-year dividend to US$2.36 per share. This represents a 6% increase on last year's payout.

CSL's final dividend of US$1.29 per share equates to $2.008 per share in local currency. And while this represents only a modest 0.8% dividend yield at current prices, it's still a nice bonus for shareholders.

It is also worth highlighting that for longer-term shareholders, this dividend will be an even more welcome boost. That's because of something called yield on cost.

Yield on cost

While we tend to focus on the current dividend yield of a share, that's not necessarily important to some investors.

For example, if you bought CSL shares in 2011 when they were trading around the $30.00 mark, this final dividend of $2.008 per share would be the equivalent of a 6.7% yield on the price you paid – your yield on cost.

If you were even luckier and bought its shares in 2000 when they were fetching $7.00, your yield on cost would be almost 29%! That means a 29% return on your original investment is heading your way today from just its final dividend.

This demonstrates why even ASX shares with modest yields can become big income payers if you hold onto them long enough.