The year 2020 was painful for ASX dividend investors. From the ASX banks to Woolworths Group Ltd (ASX: WOW), former blue chip income stalwarts were forced to slash and even cancel dividend payments to levels I’m sure no ASX investor thought was possible.
Take Westpac Banking Corp (ASX: WBC). Westpac did not pay investors an interim dividend at all last year, the first time since the 1980s.
But in 2021 so far, this trend looks well on the way to reversing. So here are 3 ASX blue chip shares that have just announced a dividend increase for their shareholders.
3 blue chip shares that have just given investors a pay raise
Coles Group Ltd (ASX: COL)
When Coles reported its earnings last week, I’m sure investors weren’t really expecting what this grocery giant had in store for them. Coles announced an interim dividend of 33 cents per share, fully franked.
That’s a 10% increase on last year’s interim payout of 30 cents a share, and a 20% bump from the company’s 2020 final dividend of 27.5 cents.
If you annualise that 33 cents payout, it would give a dividend yield of 4.05% on current pricing, or 5.79% grossed-up with full franking.
Rio Tinto Limited (ASX: RIO)
Mining giant Rio Tinto was another ASX blue chip that delighted investors last week with a hefty dividend rise. Rio, like its ASX mining stablemates BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG), has been benefitting enormously from strong commodity prices, especially iron ore. Last week, Rio reported iron ore revenues were 13.4% higher year over year.
That helped Rio declare a final dividend of US$3.09 and a special dividend of 93 US cents per share. That’s well up from the company’s previous final dividend of US$2.31. On the current exchange rate and share price, that dividend would give an annualised yield of roughly 7.98%, or 6.13%, if you only take the dividend’s final component.
CSL Limited (ASX: CSL)
CSL is another ASX blue chip that delivered a hefty dividend rise last week. The company reported its earnings last Thursday and gave investors a few surprises. Revenues were up 16.9%, and net profits after tax up 45%.
That helped CSL bump its dividend by 9% to US$1.04 a share from 2020’s interim payout of 95 US cents.
On current exchange rates and the CSL share price, that would equate to an annualised dividend yield of 0.98%. However, as my Fool colleague Tristan Harrison astutely noted last week, ASX investors actually got a 9% cut to their real payouts due to the sharp rise in the Aussie dollar against the US dollar over the past year.
Even so, a 9% dividend increase in US dollar terms is still a solid result, beating out inflation many times over.
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Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. 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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