With a special dividend declared atop the ordinary dividend and an improving performance outlook, the Magellan share price is up a whopping 18.6% in afternoon trade today.
If you're looking to bank that passive income, here's what you need to know.
What's going on with the Magellan dividend?
Most of the core metrics Magellan reported were down in FY23.
Average funds under management, for example, slumped 48% year on year to $48.8 billion.
But the fund manager reported success with its ongoing five-year reset strategy, saying it is "now at the next stage of its evolution".
And passive income investors will certainly be taking note of the latest Magellan dividend.
The Magellan board declared a final dividend of 35.6 cents per share and a performance fee dividend of 4.2 cents per share.
Noting the strength of the company's balance sheet, with no debt, the board also declared a special dividend of 30 cents per share, 85% franked.
That brings the upcoming dividend payout to 69.8 cents per share.
At the current Magellan share price of $10.91, that equates to an "instant" yield of 6.4%. (Adding in the interim dividend, the ASX 200 share trades on a yield – partly trailing, partly yet to be paid – of 10.7%).
The company noted that its Funds Management segment represents the core business that drives profits and dividends.
Commenting on the Magellan dividend, CEO David George, said:
We have a highly profitable business, with strong cash flows and a balance sheet with no debt. We are committed to delivering positive outcomes for our clients and shareholders. Evidence of this is the total ordinary dividends of 86.7 cents per share for the financial year, as well as the special dividend of 30.0 cents per share declared by the board.
When do ASX 200 investors need to own shares to score this passive income?
If you're looking to bank the 69.8 cents per share Magellan dividend you'll need to own the stock at market close next Tuesday, 22 August. Magellan shares trade ex-dividend on 23 August.
Eligible investors can then expect that passive income to hit their bank accounts on 7 September.
The dividend reinvestment plan (DRP) is not active for this payout.