3 key metrics AMP Limited shareholders must watch out for

While August reporting season (which is nearly upon us) is primarily a time when investors churn their way through numerous full year results, there are also a handful of important companies which will report their interim results.

One company which falls into this second category is AMP Limited (ASX: AMP) which operates on a calendar year basis.

As a widely held stock and with a share price which is down almost 10% in the past year, compared with a 1.5% fall in the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO), AMP’s results for the six months ending June 30 will be closely scrutinised by many investors.

Here are three key metrics which investors will watch.


AMP paid a final dividend earlier this year for the year ending 31 December 2015 of 14 cents per share (cps) which was 90% franked.

The level of franking has been increasing over the past few years. Back in 2013 the final dividend paid was only 65% franked. By 2014 the dividends were 70% franked and in 2015, the franking climbed to 85%.

Investors will be keen to see if AMP has gained the capacity to fully frank its next dividend.

Meanwhile, according to analyst consensus data provided by CommSec, the full year dividend is forecast to rise by 1.5 cps to 29.5 cps. Investors will be looking for signs in the interim results that this forecast will be met.

Wealth Management

AMP’s Australian Wealth Management division is the single largest earnings contributor, accounting for nearly 40% of group profits before head office costs in 2015. In 2015, this division experienced profit growth of nearly 10%.

With assets under management (AUM) within this division a key factor in Wealth Management’s overall profitability, the AUM figure is a key metric to follow. In 2015, average AUM increased by 10%.

Wealth Protection

The Australian Wealth Protection division has been the clear laggard for AMP in recent times. In May the group was forced once again to issue an update regarding further weak performance from this division due to “claims experience losses of $18 million” during the first quarter.

While the interim wealth protection result is almost certain to be lacklustre, investors will be looking for signs that the situation is improving, particularly considering it is the second-largest profit contributor to the group.

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Motley Fool contributor Tim McArthur has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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