The Domino's Pizza Enterprises Ltd. (ASX: DMP) dividend is on the rise following a strong FY21 results announcement on Wednesday.
How did Domino's perform in FY21?
Domino's delivered a well-rounded result despite the uncertain and challenging conditions caused by COVID-19.
Network sales increased 14.6% year-on-year to $3.74 billion which helped underlying earnings Before Interest and Tax (EBIT) lift 27.2% to $293 million and net profit after tax surge 29.2% to $188.2 million.
The company said that it is "demonstrating sustained growth by retaining customers from the initial peaks of the pandemic, with a two-year cumulative Same Store Sales growth of 13.7%."
During this period, Domino's successfully opened 285 new stores, growing its stores network by 10.7%.
The company successfully surpassed its prior 3-5 year outlook goals, which includes growing its store network between 7-9% and increasing same-store sales growth between 3-6%.
The Domino's share price initially opened flat on Wednesday, at $126.91. However, a flurry of buying activity throughout the day would rally the company's shares to all-time highs of $135.76 by market close.
Domino's dividend jumps 45%
The Board determined that it will increase its payout ratio from 70% to 80% in recognition of "this new phase in the Domino's growth, and the expected free cash flow this will return".
Domino's declared a final dividend of 85.1 cents per share with a 70% franking, bringing its total dividend for FY21 to 173.5 cents per share.
At today's prices, this represents a yield of 1.27%.
While 1.27% might not sound like much, the Domino's share price has indeed rallied 53.5% year-to-date and up 76% in the last 12 months.
A small dividend on top of an outstanding share price performance is a win-win for shareholders.
Key dates for Domino's dividend
The Domino's share price will go ex-dividend on Wednesday, 25 August and paid out on Thursday, 9 September.
