Dividend payment history
Infosys (INFY) has a strong background in paying half-yearly dividends to its shareholders on a regular basis. In the last five years, the company paid ~$3.9 billion in dividends to its shareholders at an average of nearly $783.0 million each year.
The chart above illustrates Infosys’s increasing dividend payment trend in the last five years. In fiscal 3Q18, the company paid a dividend of $526.0 million. At the end of fiscal 9M18, Infosys paid a total dividend of nearly $1.2 billion compared to $1.0 billion distributed in fiscal 9M17.
Peer comparisons and total capital return
Infosys’s dividend yield is ~2.3%. The current dividend yields of software players International Business Machines (IBM), Oracle (ORCL), and Microsoft (MSFT) are ~3.8%, ~1.5%, and ~1.8%, respectively.
In fiscal 3Q18, Infosys repurchased $2.0 billion in shares. The company made a total capital return of nearly $3.2 billion to its shareholders through buybacks and dividend payments in fiscal 3Q18.
On a cumulative basis, Infosys generated free cash flow of ~$1.5 billion in fiscal 3Q18 compared to $1.2 billion in fiscal 3Q17. This healthy free cash flow, coupled with lower leverage, may allow Infosys to maintain a robust capital return policy going forward.