How does the IAG (ASX:IAG) dividend compare to its sector?

What are IAG’s dividends looking like today?
The post How does the IAG (ASX:IAG) dividend compare to its sector? appeared first on The Motley Fool Australia. –

The Insurance Australia Group Ltd (ASX: IAG) share price isn’t having a great start to the trading week. At the time of writing, IAG shares are down 0.74% to $5.39 a share.

This latest move comes after some turbulence with the IAG share price last week. This insurance giant released its full-year earnings report for the 2021 financial year last Wednesday, and investors seemed confused as to how to respond.

A big week for IAG

Although IAG reported an increase in cash earnings, margins and its dividend, it also reported a $427 million net loss for the period (albeit due to a large one-off cost). Initially, investors sent IAG shares down more than 2% following the release. But in the days since, IAG shares have climbed back to where they stand today, rising close to 5% since last Wednesday (despite today’s dip).

But let’s dig a little deeper into the dividends that IAG is currently offering. After all, a big hike in the company’s shareholder payouts was arguably the centrepiece of last week’s earnings report.

So IAG’s last dividend was paid out on 30 March 2021 – a 7-cents-per-share unfranked interim dividend. IAG did not pay a final dividend for 2020. Before that, the company paid out 2 dividends for 2019. The first was a final payment of 20 cents per share, partially franked at 70%, paid out on 30 September 2019. The second was a final dividend of 10 cents a share, also franked to 70%, paid out on 25 March 2020.

As it stands today, IAG has a trailing dividend yield of 3.71%. That number takes into account the final dividend of 13 cents per share, to be paid out on 22 September 2021, which IAG announced last week. If we annualise this most recent dividend, we get a potential forward yield of 4.83% on current pricing.

So how do these dividend yields compare to other companies in IAG’s arena?

How does the IAG dividend compare to other ASX financials?

Well, as an insurance giant, IAG falls into the ASX financials sector. This sector is dominated by the big ASX banks. As it stands today, Commonwealth Bank of Australia (ASX: CBA) currently has a dividend yield of 3.41% on offer. Westpac Banking Corp (ASX: WBC) is offering 3.44%, while National Australia Bank Ltd. (ASX: NAB) is putting up 3.26%. Australia and New Zealand Banking GrpLtd (ASX: ANZ) tops the major banks with 3.65% on offer today.

As is evident, IAG pips all of these major banks with its current yield.

But what about the ASX financial shares outside the ASX banks? Well, let’s look at some other insurance companies. QBE Insurance Group Ltd (ASX: QBE) will pay out an 11-cents-per-share dividend on 24 September. This comes after QBE skipped its last dividend (for the second half of 2020). That gives QBE a trailing yield of 0.88% on current pricing, and an annualised potential forward yield of 1.76%.

Another share we can compare to IAG is the fellow insurer and bank Suncorp Group Ltd (ASX: SUN). Suncorp currently has a dividend yield of 5.34%, based on the 48-cents-per-share (fully franked) payout it announced last week.

So IAG’s current dividend yield is certainly towards the upper end of its ASX financials sector as it stands today. At IAG’s current share price, the company has a market capitalisation of $13.28 billion.

The post How does the IAG (ASX:IAG) dividend compare to its sector? appeared first on The Motley Fool Australia.

Should you invest $1,000 in IAG right now?

Before you consider IAG, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and IAG wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

August has been a good month for the IAG (ASX:IAG) share price
CBA’s bumper profit, IAG’s loss and Telstra expectations. Scott Phillips on Nine’s Late News

ASX 200 rises, CBA climbs after FY21 report, Iress jumps

The ASX reporting wrap-up: CBA, Mineral Resources, IAG

Why Accent, Bluebet, IAG, & Megaport shares are tumbling lower

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!