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.
