Well, one of the biggest pieces of news on the ASX boards today is the latest earnings report from Coles Group Ltd (ASX: COL). This morning, Coles reported its half-year earnings for the six months to 31 December, as well as revealing a new dividend.
Investors have been impressed, to say the least.
As we went through this morning, Coles' earnings couldn't be more different to those of its arch-rival Woolworths Group Ltd (ASX: WOW), which we got a look at just yesterday.
The ASX 200 blue-chip stock and grocery giant reported revenues of $23.04 billion for the period, up 3.7% year-on-year. Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at $2.14 billion, a 12.5% improvement. That helped Coles' underlying net profit after tax (NPAT) to shoot up 6.4% to $666 million (nothing superstitious there).
So all smiles for Coles for its first half of the 2025 financial year.
But let's talk dividends.
Coles announces 2.8% dividend pay rise
These increases in earnings and profits helped allow Coles to reveal an interim dividend of 37 cents per share to kick off 2025. Like all of Coles' dividends since 2018, this will come with full franking credits attached.
Coles reported an earnings per share (EPS) metric of 43.1 cents for the half year. As such, this dividend represents a payout ratio of 85.85% of those earnings.
This latest dividend represents a 2.8% pay rise over the interim dividend worth 36 cents per share that investors enjoyed last year. It's also the highest interim dividend investors have enjoyed since Coles shares were spun out of Wesfarmers Ltd (ASX: WES) back in 2018.
Coles has nominated 5 March next month as this payout's ex-dividend date. As such, any investor who wishes to receive this dividend but doesn't yet own any Coles shares has until the market close next Tuesday, 4 March, to buy shares. Anyone who buys the stock on 5 March or later won't get the rights to receive this dividend attached to their shares.
For those eligible investors, dividend payday will then come around on 27 March.
Eligible investors have until close of business on Friday, 7 March, to nominate for Coles' optional dividend reinvestment plan (DRP). If investors opt in to the DRP, they can receive additional Coles shares for this dividend in lieu of the traditional cash payment.
Coles shares have responded well to today's earnings, with the supermarket operator currently (at the time of writing) up 5.5% at $20.77 after hitting a new record high of $20.64 this morning.
At this share price, Coles is trading on a trailing dividend yield of 3.27%. If we factor in the company's newest payout, Coles stock would have a forward dividend yield of 3.32%.
