Force Motors-Dividend Analysis

According to the above table as on March 2014, Force Motors had an equity dividend of 30% with a dividend per share value of 3. The share price is currently 337.65, and hence we have a dividend yield of .9%.The graph tracing the dividend yield for past five years is given below.

2014 2013 2012 2011 2010Book Value (Rs) 930.48 875.02 867.69 253.7 215.02

Shares in issue (lakhs) 131.76 131.76 131.76 131.76 131.76

Earnings Per Share (Rs) 58.97 10.84 625.62 44.49 45.86

Equity Dividend (%) 30 30 100 50 30

Profit Before Tax 62.64 19.13 1,011.30 81.59 40.27

Book Value (Rs) 930.48 875.02 867.69 253.7 215.02

Reported Net Profit 77.69 14.28 824.33 58.62 60.42

Dividend per share 3 3 10 5 3

Over the past 5 years, both dividends per share and earnings per share have been fluctuating wildly. The dividend per share was at its peak in 2012 with a value of 10 . In 2012 the net profit rose 3714.81% to Rs 798.44 crore in the quarter ended March 2012 as against Rs 20.93 crore during the previous quarter ended March 2011 . This explains the sudden spike in the dividend yield during the year 2012. However this profit could not be sustained and in the subsequent years the dividend payout settled to more stable levels.