In case Nvidia (NASDAQ: NVDA) wasn't already beloved among investors, now the semiconductor giant is enticing income seekers by increasing its quarterly dividend payouts. The distributions still won't be huge on a percentage basis, but Nvidia's cash payouts will be a nice bonus for long-term shareholders.
Nvidia made another important announcement along with the dividend hike which may confuse some investors. There's no need to worry, though, as the upcoming changes won't diminish the incentive to buy and hold Nvidia stock.
A small yield gets a big raise
Amid a slew of positive first-quarter fiscal 2025 data points, Nvidia's dividend raise announcement may have gotten lost in the shuffle for some investors. Yet income harvesters shouldn't downplay the significance of Nvidia's upcoming quarterly dividend hike.
To recap the announcement, Nvidia will increase its quarterly per-share dividend distribution by 150% from $0.04 to $0.10. There's still time to get in, as Nvidia's shareholders of record on June 11 will be paid on June 28 (though, depending on your broker, it might take a few extra days to see the cash payment show up in your account).
What about Nvidia's stock split?
That's all simple enough, but there's another, concurrent announcement from Nvidia that might complicate things. Specifically, Nvidia is enacting a 10-for-1 forward stock split. If you're an Nvidia shareholder of record on June 6, you'll receive nine additional Nvidia shares after the market closes on June 7; trading on a split-adjusted basis will begin on June 10.
So, for example, the Nvidia share price might be reduced from roughly $1,160 to $116. What's known for certain, though, is that the increased dividend distribution will be $0.01 per share after the split rather than $0.10 per share.
A penny per share per quarter doesn't sound like much, and the forward annual dividend yield will still be minuscule (0.0034%). Still, at least the quarterly per-share payment will be 150% better than the $0.004 it would have been, post-split, without Nvidia's dividend hike.
