Why did the AMP share price leap 12% in August while the ASX 200 took a dive?

ASX 200 investors sent the AMP share price sharply higher in August.

| More on:
a man raises his fists to the air in joyous celebration while learning some exciting good news via his computer screen in an office setting.

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

The AMP Ltd (ASX: AMP) share price was a standout performer in August.

Shares in the S&P/ASX 200 Index (ASX: XJO) financial stock closed out July trading for $1.13 apiece. On 31 August, the AMP share price closed at $1.265, up 11.5%.

That represents an exceptionally strong run when you consider the ASX 200 fell 1.4% over the month.

So, what helped boost the stock over the month gone by?

What were ASX 200 investors considering over the month?

The biggest factor that helped push the financial stock higher even as the ASX slid in August was the strength of the company's half-year results, released on 10 August.

Although the AMP share price slid in early trade on the day, the stock finished its reporting day up 4.5% and gained another 8.3% the following trading day.

Among the highlights of those results, the company reported $1.4 billion in revenue, up 31% from the prior corresponding half year. And underlying net profit after tax (NPAT) leapt 23.9% from 1H FY22 to $57 million.

This saw management declare an interim dividend of 2.5 cents per share, franked at 20%. With a full-year payout of 5.0 cents per share, the financial stock trades at a partly franked trailing yield of 4.0%, which likely saw it receive some support from passive income investors in August.

The AMP share price also got some tailwinds from management's ongoing share buyback program.

When a company engages in buying back its own shares, it can often boost the share price as the same number of investors will be pursuing a smaller quantity of shares.

Commenting on the dividend payouts and share buyback at AMP's half-year earning's release, CEO Alexis George said:

As part of our capital management program, we have returned $610 million in capital to shareholders through the share buyback and dividends in the past 12 months, and we have a remaining $140 million to be returned by the end of October 2023, through the interim dividend we have announced today and further share buybacks.

This works out to $750 million of capital returned to shareholders over the period.

AMP share price snapshot

With a strong month behind it, and despite slipping 1% in September, the AMP share price is back into the green over the past 12 months, up 11%.

Motley Fool contributor Bernd Struben 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 »