AGL Energy Ltd (ASX: AGL) shareholders have reason to celebrate today. The AGL share price surged over 3% in response to the release of the company's full-year financial results, and the AGL dividend has also been substantially increased.
The AGL share price is currently trading at $11.12.
As the chart below shows, the last six months have been very positive for the company, with the AGL share price up around 30%.
My colleague Bernd Struben has already covered the FY24 result, which showed significant growth of 189% for the underlying net profit after tax (NPAT) to $812 million. This came about from "more stable market conditions throughout the financial year, along with the impact of higher wholesale electricity pricing from prior periods being reflected in pricing outcomes, trading and contract positions."
In this article, we'll focus on the generous dividend payment the ASX energy share announced just now.
FY24 AGL dividend
With the FY24 result, the board of directors declared an unfranked final dividend of 35 cents per share. This represents a year-over-year increase of 52% compared to the FY23 final dividend.
The final dividend is consistent with the ASX energy share's policy to target a dividend payout ratio of 50% to 75% of annual underlying net profit after tax.
AGL's FY24 final dividend has been decided using a target 50% payout ratio of underlying NPAT for the total FY24 dividend.
The FY24 full-year dividend is 61 cents per share, representing an increase of 96.8% year over year compared to the 2023 financial year.
AGL's 50% target payout ratio for the full year recognises the business' upcoming capital requirements, including the construction of the Liddell battery and the implementation of the retail transformation program.
The FY24 final dividend is unfranked, but AGL intends to begin paying partially franked dividends from the FY25 interim dividend. Future franking levels and the dividend payout ratio remain subject to board approval.
At the current AGL share price, the payout represents a dividend yield of 5.5%.
When will the payout be sent to shareholders?
AGL announced that the ex-dividend date for the FY24 final dividend is 27 August 2024, which means investors need to own AGL shares before this date to be entitled to the payment.
That means investors need to have bought shares before the end of trading on 26 August 2024 to receive the upcoming dividend payment.
The dividend will be paid on 24 September 2024, so investors only have to wait around six weeks to receive their passive income payment.
