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Owners of AMP Ltd (ASX:AMP) stocks will soon receive their dividends in their bank accounts.
I really enjoy receiving dividends because it’s an effortless way to earn returns. In fact, investors don’t have to do anything at all to get regular “real” returns in their bank accounts.
Companies do their best to make a profit every year, and some companies then share that profit with shareholders in the form of dividends.
That said, let’s see what’s in store for AMP shareholders.
Upcoming AMP Dividend
The ASX financial share has already gone ex-dividend, which means that new investors can no longer claim the company’s upcoming dividend.
People who owned AMP stock prior to the August 23, 2023 ex-dividend date are on track to receive AMP’s FY 23 semiannual dividend of 2.5 cents per share.
Investors who wanted to participate in the Dividend Reinvestment Plan (DRP) had until August 25, 2023 to choose to do so. This is where shareholders can decide to receive new shares in lieu of a cash payment.
At the current AMP share price, the interim dividend equates to a partially prepaid dividend yield of 2%. That’s not bad for a semi-annual payment from a company that some investors say is struggling.
How big can the payout be for the whole year?
AMP has now paid dividends for two half-year results in a row. Perhaps the company has returned to making regular payments to shareholders after a break in payouts for most of the COVID-19 period.
Commsec’s current projection is that the company will also continue with a 2.5 cent per share final dividend payout for FY23. That would bring the full dividend for fiscal year 2023 to 5 cents per share.
At AMP’s current share price, this indicates a 4% prepaid dividend yield for investors.
Are AMP Stocks Attractive?
The ASX financial stock has experienced significant volatility over the past twelve months as we can see in the chart below.
However, the segments are seeing an improvement in underlying performance. In the first half of FY23, AMP Bank’s underlying net profit after tax (NPAT) grew 23.9% to $57 million. During the same period, the company’s platform segment generated 25.7% growth in underlying NPAT to $44 million. AMP’s consulting division improved its net loss by $5 million to a loss of $25 million.
According to Commsec estimates, the company could earn earnings per share (EPS) of 7.1 cents. This would mean that the price/earnings ratio (P/E) for FY23 is 17. But by FY25, this could yield earnings per share of 10.2 cents. That’s a price-to-earnings ratio of 12.
According to analyst recommendations collected by Commsec, the ASX financial stock is rated a buy by two analysts, a sell by two analysts, while five analysts believe it is a headlock. Perhaps this suggests that AMP stock price won’t do much in the near term.
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