Pepper Money shares continue to soar; trades on trailing 8.8% fully franked dividend yield

Pepper Money profits gain 11% as leading ASX non-bank lender reports maiden fully franked interim dividend.

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The Pepper Money Ltd (ASX: PPM) share price is gaining another 10% to $1.67 in Thursday trading. It comes the day after the non-bank lender reported first-half full-year pro-forma net profits after tax up 11% to $73.1 million.

The company declared an interim fully franked dividend of 5.4 cents per share. When added to the final fully franked dividend of 9 cents per share, Pepper Money's trailing 12-month total dividends are 14.4 cents per share.

The Pepper Money interim dividend will be paid to eligible shareholders on 14 October 2022. Pepper Money shares go ex-dividend on 14 September 2022. 

Based on the Pepper Money share price today, the stock trades on a trailing fully franked dividend yield of 8.8%. The company anticipates future dividend payments will be weighted equally between interim and final, reflecting the seasonality in the business.

Looking ahead, Pepper Money notes that since the Reserve Bank of Australia commenced interest rate rises in May 2022, the industry has experienced a decline in mortgage applications. The company says it is "well positioned to navigate the current challenging market conditions".

Over the past 12 months, Pepper Money shares have lost 38%, compared to a fall of 6% in the S&P/ASX 200 Index (ASX: XJO). By contrast, fellow financial services company Money3 Corporation Limited (ASX: MNY) shares have slumped 33% in the last year.

Motley Fool contributor Bruce Jackson 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 Scott Phillips.

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