Own AMP shares? Here's what you have to look forward to in September

It's almost dividend time for the ASX financial share.

| More on:
A middle-aged woman sits in contemplation over a tablet device considering information about ASX shares and deep in thought.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Owners of AMP Ltd (ASX: AMP) shares will soon be getting their dividends paid into their bank accounts.

I really like receiving dividends because it's an effortless way to reap returns. In fact, investors don't really need to do anything at all to get regular 'real' returns paid into their bank accounts.

Businesses are doing their best to make a profit each year, and some companies then share that profit with shareholders in the form of dividends.

That said, let's check what's ahead for AMP shareholders.

Upcoming AMP dividend

The ASX financial share has already gone ex-dividend, meaning new investors can't gain entitlement to the company's upcoming dividend any more.

For people who owned AMP shares before the ex-dividend date of 23 August 2023, they're on track to receive AMP's FY23 half-year dividend of 2.5 cents per share.

Investors who wanted to take part in the dividend re-investment plan (DRP) had until 25 August 2023 to elect to do so. This is where shareholders can decide to receive new shares rather than a cash payment.

At the current AMP share price, the interim dividend amounts to a partially franked dividend yield of 2%. That's not bad for a half-year payment from a business some investors say is struggling.

How big could the full-year payout be?

AMP has now paid a dividend for two half-year results in a row. Perhaps it may have returned to making regular payments to shareholders after a payout hiatus during most of the COVID-19 period.

The current projection on Commsec is that the business will continue with a 2.5 cents per share payout for the FY23 final dividend as well. That would bring the full 2023 financial year dividend to 5 cents per share.

At the current AMP share price, that suggests a partially franked dividend yield of 4% for investors.

Are AMP shares attractive?

The ASX financial share has been through significant volatility over the last 12 months, as we can see on the chart below.

However, its segments are seeing the underlying performance improve. In the first half of FY23, AMP Bank grew underlying net profit after tax (NPAT) by 23.9% to $57 million. Over the same period, the company's platforms segment generated 25.7% growth of underlying NPAT to $44 million. AMP's advice division improved its net loss by $5 million to a loss of $25 million.

Commsec estimates suggest the business could make earnings per share (EPS) of 7.1 cents. This would mean the price/earnings (P/E) ratio for FY23 is 17. But, by FY25, it could make EPS of 10.2 cents. That's a forward P/E ratio of 12.

According to analyst recommendations collated by Commsec, the ASX financial share is rated as a buy by two analysts, a sell by two analysts, while five analysts think it's a hold. Perhaps this suggests the AMP share price isn't going to do that much in the shorter term.

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 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.

More on Financial Shares

Man pointing at a blue rising share price graph.
Financial Shares

How is this ASX 200 financial stock popping 6% today?

This lucky company has just swung into the green in 2024...

Read more »

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices
Financial Shares

AMP share price falls on first-quarter update

How did AMP perform during the first quarter?

Read more »

A young woman sits with her hand to her chin staring off to the side thinking about her investments.
Financial Shares

Why the Macquarie share price could soar 16% on an overlooked factor

A double-edge sword might be Macquarie's secret weapon for huge upside.

Read more »

Smiling elderly couple looking at their superannuation account, symbolising retirement.
Financial Shares

Suncorp share price hits new 52-week high amid $375m asset sale

Suncorp is offloading another asset as it reshapes its business.

Read more »

A young man goes over his finances and investment portfolio at home.
Financial Shares

Are IAG shares worth buying right now?

IAG shares have climbed high, but is there further to go?

Read more »

A man with long hair and tattoos holds out an EFTPOS payment machine from behind a shop counter.
Financial Shares

1 dirt-cheap ASX stock I'd buy as Aussie cash carrier looks for a lifeline

Every crisis comes with an opportunity. I reckon this payments company is in the buy zone as cash crumbles.

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Financial Shares

Why is this ASX 300 stock crashing 23% today?

Shareholders of this stock have been hit with some bad news.

Read more »

Happy man working on his laptop.
Financial Shares

3 things about AFIC stock every smart investor knows

These are underrated factors about the LIC.

Read more »