Insurance Australia Group Ltd (ASX: IAG) shares will pay a significantly higher final dividend after the company reported a net profit after tax (NPAT) of $898 million for FY24, up 7.9% from FY23.
The insurance giant released its FY24 results on Wednesday.
IAG revealed it would pay a final dividend of 17 cents per share with 50% franking. That's 89% higher than the final dividend of FY23, which was 9 cents per share with 30% franking.
The boosted final dividend brings the full-year payment to 27 cents per share vs. 15 cents in FY23.
Based on Thursday's closing price of $7.35, that's an annual dividend yield of 3.67% plus partial franking.
Want to bag the latest dividend from IAG shares?
ASX investors wanting to bag the next IAG dividend need to act fast. Those who don't already own the ASX financial stock need to get moving because the ex-dividend date is just around the corner.
The IAG ex-dividend date for the final dividend of 17 cents per share is next Thursday 29 August.
From that date, IAG shares will not carry the entitlement to the final dividend. So, new investors who want to receive the dividend need to buy IAG shares by next Wednesday at the latest.
IAG will pay the final dividend on 26 September.
How did IAG's FY24 numbers look?
IAG shares have recovered well in the post-COVID era. They are one of few ASX stocks to benefit from the explosion in inflation, given many consumers consider insurance a non-negotiable expense.
This means they are willing to pay higher premiums to remain insured despite cost-of-living pressures.
IAG reported a 79.1% increase in insurance division profits to $1.44 billion in FY24. Net earned premiums rose by 11% and the reported insurance margin was 15.6%, up from 9.6% in FY23.
IAG said the increased insurance profit and earned premiums, coupled with 35% higher investment income on shareholder funds at $286 million, were the main contributors to its NPAT boost.
IAG managing director and CEO Nick Hawkins said:
The strategic measures we have put in place over the past few years have created a stronger and more resilient IAG.
We've streamlined our Australian business, established a clear brand strategy and launched NRMA Insurance nationally, outside of Victoria.
We have also improved our claims management capability to ensure we are well placed to support our customers when they need us the most.
IAG share price snapshot
The IAG share price has risen by about 60% over the past two years.
In the week before it posted its FY24 results, IAG hit a new 52-week high of $7.49.
Goldman Sachs has a neutral rating on IAG with a 12-month share price target of $7.20.
The consensus rating among analysts on the CommSec platform is a moderate buy.
