Macquarie Group Ltd (ASX: MQG) shares are under pressure on Friday.
This follows the release of the investment bank's half year results, which revealed that its board has lifted its interim dividend.
At the time of writing, Macquarie's shares are down 4%.
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The Macquarie dividend
Let's start with its profits for the half before tackling its dividend.
As we covered earlier, Macquarie delivered solid profit growth on an annual basis during the six months ended 30 September.
Thanks to strong performances from its Annuity-style businesses, which offset profit declines from its Markets-facing businesses, the company's net profit after tax increased 14% to $1,612 million.
Macquarie's CEO, Shemara Wikramanayake, said:
Macquarie's improved performance this half year was underpinned by improved realisations in Macquarie Asset Management and further progress in the digitalisation programme in Banking and Financial Services, reflecting the ongoing benefits of our diverse business mix.
In light of this profit growth, the Macquarie board elected to increase its interim dividend year on year.
It declared a partially franked (35%) interim dividend of $2.60 per share. This is up 5 cents or 2% on the $2.55 per share interim dividend Macquarie paid a year ago.
It represents a payout ratio of 61%, which puts it in the middle of the company's target payout ratio range of 50% to 70%.
Based on the current Macquarie share price, this equates to a modest dividend yield of 1.2%.
When is pay day?
If you want to be eligible to receive this dividend, you will need to own Macquarie's shares before they go ex-dividend.
According to the release, the company has set an ex-dividend date of 11 November and a record date of 12 November.
After which, shareholders can look forward to being paid this dividend just over a month later on 17 December. Just in time for some Christmas shopping!
Alternatively, shareholders could take advantage of its dividend reinvestment plan (DRP).
Commenting on the DRP, the company said:
The Company's Dividend Reinvestment Plan (DRP) remains active. The DRP is optional and offers ordinary shareholders in Australia and New Zealand the opportunity to acquire fully paid ordinary shares without transaction costs.
It is expected that shares allocated under the DRP will be purchased on market and allocated on the dividend payment date. The DRP shares will rank pari passu with other fully paid ordinary shares then on issue. The allocation price will be the arithmetic average of the daily volume weighted average market price of all Macquarie Group shares sold through a normal trade on the ASX trading system over the ten business days commencing on the fourth business day after the Election Date of 13 November 2024.
