Earnings season on the ASX is now wrapping up for the vast majority of ASX shares. Last week was the last hurrah, and we heard from some of the biggest names on the S&P/ASX 200 Index (ASX: XJO). One of those was the Woolworths Group Ltd (ASX: WOW) share price.
Yes, Woolworths reported its half-year earnings last Wednesday, 23 February. And it made for some interesting reading. As we covered at the time, the grocery giant reported an 8% increase in revenues, but an 11% drop in earnings. Net profits after tax (NPAT) also fell, dropping 6.5% to $1.38 billion.
But for many investors that hold Woolworths shares, the most important metric to watch was Woolworths' dividends per share. As an ASX 200 blue-chip share in the consumer staples space, Woolies shares undoubtedly have a place in many an ASX income investors' portfolio. So let's check out what the company had to say to investors on this front.
So Woolworths announced an interim dividend of 39 cents per share last week. As is usual for the company, the dividend will come with full franking credits. Woolworths shares will trade ex-dividend for this payment on 3 March, with the date of payment set at 13 April. The company's dividend reinvestment plan (DRP) is available for investors with no discount.
How does Woolworths shares' interim dividend measure up?
But how does this interim payment compare to Woolworths' past dividends? Unfortunately for those investors who value income, this payment represents a meaningful drop from what investors might have been used to in recent years. This 39 cents per share interim payment is a 26.4% drop from the 53 cent interim dividend Woolies paid out last year. The company's previous final dividend that investors saw distributed in October was 55 cents per share.
In fact, Woolworths' latest interim dividend is the lowest the company has forked out in years, since 2017 to be precise. However, there is a caveat to that. This payment is the first interim dividend since Woolworths spun off Endeavour Group Ltd (ASX: EDV) last year.
Endeavour, which owns Woolworths' old liquor and bottle shop businesses, was a significant source of earnings for the company. As such, investors can't be too surprised that its separation has resulted in a lower Woolworths dividend going forward. In its earnings report last week, Woolworths chair Gordon Cairns addressed this. Here's some of what he said:
The Board has declared an interim dividend of 39c. Excluding the 13c related to Endeavour Group in H21, the dividend is broadly in line with the prior year.
Mr Cairns also highlighted that Woolworths had returned $2 billion to shareholders through share buybacks since the Endeavour demerger. Earlier his month, Endeavour announced an interim dividend of 12.5 cents per share, fully franked, of its own.
At the current Woolworths share price, this ASX 200 blue chip has a market capitalisation of $42.73 billion, with a dividend yield of 2.67%.
