Nvidia boosted its dividend 150% this week. Sounds impressive. But if you're looking to the AI stock for income, you'll still be disappointed.
Even following the dividend hike, Nvidia yields just 0.04%. That ranks just 401st in terms of yield in the S&P 500, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSurge.
It's also a fraction of the S&P 500's yield of 1%. But it's important to note the dividend isn't where Nvidia's action is. It's the growth of AI. "We see no signs of AI demand slowing," said Morningstar analyst Brian Colello.
Nvidia's Dividend Is Just A Footnote
Looking at Nvidia's total return highlights just how insignificant the dividend is.
Had you invested $10,000 in the stock 10 years ago, your position would now be worth $2.2 million just based on the stock's gains.
That's more than you've made on any S&P 500 stock in that time. The S&P 500 itself is only up 176% in that time, only turning your $10,000 investment to $27,627. You'd be more than $2.2 million richer by going with Nvidia over just the S&P 500.
What's Next For Nvidia
So if Nvidia's dividend isn't where the action is, what's the stock's future?
Analysts remain bullish. They're calling for Nvidia stock to be worth 1,166 in 12 months' time. If that's right it means there's still plenty of upside left. Shares of Nvidia Thursday closed at 1,037.99, or 12% below analysts' estimate.
And the fundamentals are strong, too. Analysts think the company's adjusted profit per share will more than double this fiscal year to 26.98.
Who needs a dividend?
How Nvidia's Dividend Compares
Top 10 S&P 500 dividends
| Company | Ticker | Yield |
|---|---|---|
| Altria Group | 8.46% | |
| Verizon Communications | 6.69 | |
| Ford Motor | 6.48 | |
| Boston Properties | 6.35 | |
| AT&T | 6.34 | |
| Crown Castle | 6.25 | |
| Healthpeak Properties | 6.15 | |
| Walgreens Boots Alliance | 6.07 | |
| 3M | 5.95 | |
| Kinder Morgan | 5.93 | |
| Nvidia* | 0.04 |
