The Wesfarmers Ltd (ASX: WES) share price is under the spotlight today after its FY25 result, where shareholders learned they're going to get a large dividend.
Wesfarmers isn't just paying a normal dividend to investors, but it has also proposed a big capital distribution too.
The owner of Bunnings, Kmart, and several other businesses had another solid year, with strong value credentials continuing to attract customers looking for good products at good prices.
Wesfarmers reported revenue growth of 4% to $45.7 billion, and underlying earnings per share (EPS) increased 3.7% to $2.34.
Let's take a look at what the upcoming payments will be for shareholders.
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Wesfarmers FY25 dividend
The Wesfarmers board of directors has decided on a fully franked FY25 final dividend of $1.11 per share. That brings the full-year dividend to $2.06 per share, representing a year-over-year increase of 4%. The full-year dividend represents 88% of underlying EPS.
The company stated that its dividend policy takes into account available franking credits, current earnings and cash flows, future cash flow requirements, and targeted credit metrics.
The final dividend of FY25 will be paid on 7 October, so investors have just over a month to wait until that payment. This dividend payment has an ex-dividend date of 2 September, so interested investors have until the end of trading on 1 September to invest in Wesfarmers shares.
At the current Wesfarmers share price, the FY25 final dividend translates into a grossed-up dividend yield of 1.7%, including franking credits. The full-year dividend translates into a grossed-up dividend yield of 3.2%, including franking credits.
Capital distribution
The company has proposed a capital return of $1.50 per share, with the form of the distribution subject to a final ruling from the ATO. It's expected to be comprised of a capital component of $1.10 per share and a fully franked special dividend of 40 cents per share.
This return is also subject to shareholder approval at the 2025 annual general meeting on 30 October.
If approved, the total distribution will be approximately $1.7 billion, and it's expected to be paid on 4 December.
This capital return is possible because of the sale of some assets in recent years, including the sale of its residual interest in Coles Group Ltd (ASX: COL), the divestment of Coregas, and the divestment of WesCEF's LPG and LNG distribution businesses.
At the current Wesfarmers share price, the dividend yield of this payment would be 1.6%, excluding the franking credit element.
