To amass sufficient Accenture shares that yield $1,000 in yearly dividends, consider the following quantities.
The tech world has been keeping a close eye on consulting firm Accenture ( with a decrease of 1.18%), as it dives headfirst into the lucrative market for artificial intelligence (AI) mastery. Unlike most tech-related stocks, Accenture is known for its consistency and reliability, consistently distributing dividends to shareholders every quarter.
For investors who trust in the company, here's the breakdown of how many shares are needed to draw an annual $1,000 from its dividends.
AI growth
In October, Accenture and prominent AI hardware and solution supplier Nvidia strengthened their partnership with a significant expansion. At the heart of this expansion is Accenture establishing an in-house consultancy unit, the Nvidia Business Group, dedicated to helping clients leverage AI solutions powered by Nvidia's popular chip technology.
Accenture's AI division is set to be quite sizable. The company plans to support it with more than 30,000 individuals receiving specialized training for this cutting-edge consultancy work.
Already, generative AI has significantly boosted Accenture's financials, totalling $3 billion worth of client bookings during its recently concluded 2024 fiscal year. Given Accenture's potential to effectively sell and manage this service, it's easy to envision that number skyrocketing.
The $59,000 query
Now, onto that dividend. To earn $1,000 annually in shareholder payouts, you need 169 shares of Accenture stock. As of the market close on Thursday, this equates to approximately $58,820.
With such a substantial financial commitment, we must ask if the distribution is sustainable. In my opinion, it is.
The financially disciplined and consistently profitable Accenture typically generates around $8.5 billion in annual free cash flow (FCF), more than enough to cover the dividend payout. During fiscal 2024, this expense amounted to $3.2 billion, with a significant portion usually going toward share buybacks ($4.5 billion that year).
To me, Accenture represents a solid and relatively under-the-radar investment opportunity to capitalize on the AI boom we're currently experiencing. The company is closely tied to a market leader in the field, and its fundamentals should naturally improve as a result.
Investors interested in expanding their finance portfolio might consider investing in Accenture, given its consistency in distributing dividends and promising growth in the AI market. To earn an annual $1000 in dividends, an investor would need to purchase 169 shares of Accenture stock, which currently equates to around $58,820.
