Insights

How much is the AGL dividend payout ratio?

What is AGL’s dividend really worth?
The post How much is the AGL dividend payout ratio? appeared first on The Motley Fool Australia. –

In February, the AGL Energy Ltd (ASX: AGL) board cut its interim dividend by 60% as the energy company released its first-half results. This prompted a short slump in the company’s shares at the time before the AGL share price rebounded and headed north again.

At Wednesday’s market close, AGL shares were trading at $8.30 apiece.

Below, we dive into the AGL dividend policy and its payout ratio.

A look at AGL’s dividend history

On 30 March, the company paid out an FY22 interim dividend of 16 cents — considerably lower than the 41 cents declared in the prior corresponding period.

Management noted the lower payout would enable AGL Australia and Accel Energy to manage capital for future growth, and maintain debt.

However, when measuring up against prior dividend payments, we need to go back to 2007 to see a lower dividend from AGL.

In addition, the last three AGL dividends paid to shareholders have been unfranked, in contrast to the previous eight years. This means those eligible for any recent dividends missed out on the tax credits.

The FY21 full-year dividend stood at 75 cents, which compares to the 98 cents recorded in the 2020 financial year.

And with FY22’s interim dividend at 16 cents, the final dividend is unlikely to match FY21’s full-year dividend.

More on AGL’s dividend payout ratio

In its H1 FY22 results, AGL delivered net cash from operating activities of $661 million, up 9% on H1 FY21. This increase was largely due to an uptick in working capital, which included a positive movement in green certificate assets and a large inflow from margin calls.

AGL said that this largely offset a reduction in earnings.

On the bottom line, underlying net profit after tax (NPAT) dropped to $194 million, down 41% from the prior comparable period.

The company had approximately $700 million in cash and undrawn debt facilities at the end of December.

The interim dividend was in line with AGL’s dividend policy to target a payout ratio of 75% of underlying profit after tax. The payout ratio is essentially the amount of a company’s earnings per share (EPS) that it pays out in dividends.

Following AGL’s upcoming demerger, the board proposes the respective dividend policies for each entity. They are as follows:

AGL Australia: 60% to 75% of underlying NPAT
Accel Energy: 80% to 100% of free cash flows after servicing net finance costs

AGL share price summary

In 2022, the AGL share price has continued to rise in value, gaining more than 35% for investors.

However, when factoring in the last 12 months, its shares are in the red, down almost 5%.

AGL has a trailing dividend yield of 6.02%, and a market capitalisation of roughly $5.58 billion.

The post How much is the AGL dividend payout ratio? appeared first on The Motley Fool Australia.

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

Before you consider AGL, 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 AGL wasn’t one of them.

The online investing service he’s run for over 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 January 13th 2022

More reading

Why is the AGL share price outperforming today?

Own AGL shares? Experts weigh in on outage fallout

Why AGL, Hub24, Rio Tinto, and Zip shares are dropping

Faults and financials: Why is the AGL share price getting zapped 6% today?

ASX 200 midday update: Ramsay rockets and Rio Tinto disappoints

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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.

  • This field is for validation purposes and should be left unchanged.

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

Share With Your Friends

Rebate Rewards

Level 2 Rebate

Deposit $2,000 and get $200 Rebate
$ 200 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $2,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $200 Rebate
Popular

Level 1 Rebate

Deposit $1,000 and get $100 Rebate
$ 100 Rebate
  • 3 Simple Steps
  • 1. Register Using The Link Below (Promo-Code: WEBREBATE)
  • 2. Deposit $1,000 and place one trade at any non-Austalian market within 30 calendar days
  • 3. Receive Your $100 Rebate

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, 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.

EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here To Get Started
EASY QUALIFICATION & LOW ENTRY
NEW CLIENT REBATE OFFER
EARN UP TO $200 CASH REBATE
Act Fast - Promotion Ends In
Click Here For More Info