2 ASX dividend shares that just grew their dividend by more than 10%

Propel is one of the ASX dividend shares that just implemented a large dividend increase.

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Some ASX dividend shares are implementing large dividend increases for shareholders in this reporting season.

It has been a strange time ever since the onset of the COVID-19 pandemic. Some businesses have been disrupted. Others have seen a boom in demand.

The following two businesses just implemented large dividend increases for their shareholders in the FY21 result:

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Propel Funeral Partners Ltd (ASX: PFP)

Propel is the second largest funeral operator across Australia and New Zealand. Despite all of the disruptions caused by COVID-19, Propel performed 13,916 funerals in FY21 – an increase of 4.6%. Death volumes were below historical long-term trends.

The average revenue per funeral in FY21 was up 4.3% to $5,917.

Those two growth numbers combined helped operating earnings before interest, tax, depreciation and amortisation (EBITDA) grow 11.9% to $36.3 million, with the EBITDA margin increasing 90 basis points to 30.1%.

Operating net profit after tax (NPAT) went up 7.6% to $15.3 million, whilst operating earnings per share (EPS) climbed 6.7% to 15.3 cents.

The Propel board decided to pay a final dividend of 5.75 cents per share. That brought the annual dividend for FY21 to 11.75 cents per share, an increase of 17.5%.

During the year, the ASX dividend share spent $29.6 million on acquisitions in New Zealand, Western Australia, New South Wales and Queensland.

In FY22, it's expecting to benefit from death volumes reverting to long-term trends, acquisitions and a "strong" funding position. It also pointed to the growing and ageing populations in Australia and New Zealand as long-term tailwinds.

In July 2021, it performed a record number of funerals, with total and comparable funeral volumes materially higher than July 2020.

Propel's FY21 dividend translates to a grossed-up dividend yield of 4.6%.

Ansell Limited (ASX: ANN)

Ansell is another ASX dividend share that has grown its FY21 dividend substantially.

Indeed, it has grown its annual dividend by 53.6% to US 76.8 cents. That was after the board decided to pay a final dividend of 43.6 cents.

This came after a large increase in profit. Sales increased 25.6% to US$2 billion, whilst net profit grew 57.5% to US$246.7 million. EPS increased by 59.9% to US 192.2 cents. That means the dividend payout ratio is only 40%, allowing the business to re-invest for more growth.

Ansell has invested during FY21. It was focused on bringing its major capacity expansions into production despite the challenging operation environment. It was able to get 12 new glove lines and several new body protection lines live which helped it deliver the profit growth it reported.

However, in some areas of the business, it's expecting lower demand in FY22 in areas that benefited the most during the onset of COVID-19, such as chemical body protection and exam/single use gloves.

Also, a number of Ansell's factories and suppliers in the region have had short-term closures or reduced operations, which could impact sales in the first half of FY22. It continues to experience increased freight costs and shipping delays.

Motley Fool contributor Tristan Harrison 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 recommended Ansell Ltd. and Propel Funeral Partners Ltd. 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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