How much will Nvidia pay out in dividends this year?

In 2012, Nvidia (NVDA 1.58%) declared the first dividend. At the time, the payout was worth about $0.001875 per share on a split-adjusted basis, equivalent to a dividend yield of about 2%.

Since then, the dividend payout per share has increased dramatically. But the total amount the company pays out in dividends today might surprise you.

That’s how much Nvidia pays out in dividends

Following a recent increase, Nvidia’s dividend payout climbed to $0.01 per share each quarter — five times the original payout. But because of the rapid rise in its share price — over the past decade, the stock has increased in value by more than 27,000% — its dividend yield fallen at only 0.03%. Nvidia’s management team simply believes that the best use of its cash is to grow the business, not to distribute it to shareholders.

Assuming the new higher rate is sustained, over the next 12 months the company should pay $0.04 per share. That’s about $1 billion in dividends — a quarterly rate of about $246 million.

But given its much higher profits, where is Nvidia investing its resources if not in dividends? Over the past 12 months, approximately $1.9 billion has gone into capital expenditures. But research and development accounted for most of the spending, with more than $10 billion deployed in the past year.

The rise of artificial intelligence has just begun, and Nvidia’s graphics processing units (GPUs) are a critical component of the industry’s growth. Not only will Nvidia need to invest in new manufacturing facilities to meet growing demand, but its R&D budget will likely need to expand further to fend off growing competition. Suffice it to say: don’t expect Nvidia to become a big dividend anytime soon. Almost all of the excess cash will be used to defend its leadership in the nascent but fast-growing AI industry.