The average dividend yield on the Australian share market is traditionally around 4%. This makes it one of the most generous in the world.
But if you thought 4% was good, wait until you see what one ASX 200 stock is preparing to pay its shareholders.
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Huge dividend yield coming
On Monday, Healius Ltd (ASX: HLS) shares overcame the market weakness and charged higher following the release of an announcement.
As you might have already guessed, that announcement revealed that the healthcare company has finalised plans to reward shareholders with a special dividend.
This follows the successful completion of the sale of Lumus Imaging to funds managed by Affinity Equity Partners last week.
Healius received cash proceeds of $822 million, which represents $965 million enterprise value when adjusted for the repayment of equipment leases and closing adjustments. Net proceeds are expected to be in excess of $800 million after all transaction fees, separation costs and other fees.
On Monday, the ASX 200 stock confirmed that it will return $300 million of this to shareholders through a fully franked special dividend of 41.3 cents per share. Those franking credits equate to 17.7 cents per share or approximately $128 million.
Based on where the Healius share price finished Monday's session, this special dividend equates to an incredible dividend yield of 26%.
The ASX 200 stock will go ex-dividend for this later this week on 9 May. After which, eligible shareholders can look forward to pay day in two weeks on 23 May.
What else?
In other news, Healius has announced a new three-year $300 million syndicated bank facility expiring in May 2028. This replaces the current $680 million facility.
As part of the refinancing, Healius has scaled back both demand and the size of the syndicate to four banks. The gearing covenant for the facility is 3.5x and interest cover is 3.0x.
Should you invest?
None of the major brokers are tipping this ASX 200 stock as a buy right now. Morgans and Macquarie are arguably the most positive with hold and neutral ratings. However, with price targets of $1.32 and $1.40, this suggests that a double digit share price decline is possible from current levels.
So, while a significant dividend yield is on the cards for buyers in the coming weeks, they may be overpaying for the privilege.
