Aussie Broadband Ltd (ASX: ABB) investors have waited a long time for some dividend income. But that long wait is over.
ASX telco shares are well-known for paying dividends. Perhaps this is mostly thanks to Telstra Group Ltd (ASX: TLS), the income machine. But other telcos, such as TPG Telecom Ltd (ASX: TPG), have also been known to fork out decent dividends.
But Aussie Broadband? Not so much. Since this mid-tier telco first hit the ASX boards in 2020, investors have been on a wild ride. Aussie Broadband shares traded as high as $6 and as low as $2.20 at various points over the past few years.
However, investors have never enjoyed any supplementary returns from dividends to assuage this share price volatility over the period.
Not that this really matters for longer-term investors since the Aussie Broadband share price remains up a compelling 86% or so from where it debuted in 2020.
But this long dividend drought has just been broken.
This morning, we reported on Aussie Broadband's latest earnings report, covering the full 2024 financial year.
As my Fool colleague went through at the time, these earnings contained some pretty impressive numbers.
Revenue was up a whopping 27% to a tantalising $999.7 million. Earnings before interest, tax, depreciation and amortisation (EBITDA) before one-offs surged by 34.5% to $120.5 million, which helped Aussie Broadband's net profit after tax (NPAT) jump 21.7% to $26.4 million.
As a result, the Aussie Broadband share price is up a chunky 12.02% so far today to $3.50 a share.
But let's get to Aussie Broadband's maiden dividend.
What you need to know about Aussie Broadband's first dividend
The company announced an inaugural dividend of 4 cents per share today. This dividend, like Telstra and TPG's payouts, will come with full franking credits attached.
Aussie Broadband has nominated 6 September next month as this payment's ex-dividend date, with the payment date of 30 September to follow later in the month.
Investors will have no option but to receive this dividend in cash, as Aussie Broadband is yet to set up a dividend reinvestment plan (DRP).
This dividend is a modest start to Aussie Broadband's income-paying credentials. At the current share price of $3.50 (at the time of writing), this payment would result in a dividend yield of 1.14%.
That would work out to be an annualised yield of 2.28% if the telco opts to pay out that same amount (which is not guaranteed of course) at its next earnings report in six months' time.
Even so, there's no doubt that investors are appreciating this news today.
