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While there are many dividend stocks that can cater to the retirement income in golden years, one stock (actually an InvIT) can also be explored. It is IRB InvIT Fund (NS:) which is an irrevocable trust set up under the Indian Trusts Act, 1882 and is sponsored by exchange-listed IRB Infrastructure Developers Ltd (NS:).
The primary business of this InvIT is to own and operate a wide portfolio of toll road assets in India. Currently, it has assets in 5 states – Maharashtra, Gujarat, Rajasthan, Karnataka, and Tamil Nadu (NS:) which include 6 projects – the Vadodara Kim Expressway (Part of the prestigious Delhi Mumbai Expressway Project), Jaipur – Deoli NH 12 Project, Pathankot – Amritsar NH 15 Project, etc.
In FY23, it clocked a record high net income of INR 369.58 crore, a good 22.1% YoY jump. This performance was achieved on a healthy profit margin of 25.28% and hence the trust managed to shell out INR 8.05 per share in distributions in the same period.
In Q1 FY24, it declared a total distribution of INR 2 per unit, and looking at the CMP of INR 70, that’s an annualized yield of about 11.42%. The actual dividend yield is also trading very close to it, at 12.53%, all thanks to the consistency of payouts.
The consistent cash flow from its toll road assets makes it one of the best options for a steady flow of passive income. Although the units have delivered a capital gain of 18% over and above distributions in the last 12 months, capital appreciation should not be the goal here. It should solely be explored from the perspective of a strong and consistent cash flow source.
X (formerly, Twitter) – aayushxkhanna
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