The Origin (ASX:ORG) dividend has dropped 20%

What’s happened to Origin’s dividends?

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The Origin Energy Ltd (ASX: ORG) share price spent yesterday in the red after the company posted a $2.2 billion loss for the 2021 financial year (FY21).

After such a hit to its bottom line, it probably didn’t shock investors that Origin had cut its final dividend. The company’s final dividend for FY21 will be unfranked and worth 7.5 cents. That’s 2.5 cents less than the fully franked final dividend Origin handed its shareholders in FY20.

On the back of the news, the Origin share price fell a hefty 4.12%. It finished the day at $4.19.

Let’s see just how far the company’s dividends fell in FY21.

The fall of the Origin dividend

The Origin share price had a tough run on the ASX yesterday, as news swirled the company had cut its dividend again.

Yesterday, the company announced it will be giving its shareholders a 7.5-cent unfranked final dividend in October 2021.

Including its previous interim dividend – worth 12.5 cents and unfranked – Origin handed 20 cents per share back to its investors in financial year 2021.

That’s significantly less than what it gave out during financial year 2020. In fact, it’s 20% less.

At the end of the 2020 financial year, Origin handed out a 10-cent final dividend. That was after it gave its shareholders a 15-cent final dividend in March.

Not to mention, the company’s 2020 financial year interim dividend was fully franked. Some investors see greater value in franked dividends as, in some instances, they can be used to lower an investor’s tax bill.

Of course, a company generally has to post a profit and, therefore, pay tax before it can give out franked dividends. That’s a feat the company didn’t manage to do in the 2021 financial year.

Origin’s 2021 financial year final dividend is also the smallest dividend it’s paid since 2005. At least back then its dividend was fully franked.

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Motley Fool contributor Brooke Cooper 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.

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