With everyone around the proverbial investing watercooler talking about Commonwealth Bank of Australia (ASX: CBA)'s latest earnings today, it can be easy to forget that CBA isn't the only ASX share with something to show investors. AGL Energy Limited (ASX: AGL) has also given investors a look at its latest financials this Wednesday, and it makes for some particularly interesting reading for dividend investors.
As we covered this morning, AGL had to show off a mixed set of numbers covering the six months to 31 December 2025. The energy generator and retailer posted an underlying net profit after tax of $353 million, down 6% on the same period in 2024. The company also revealed a statutory profit after tax of $94 million. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $1.09 billion, which was essentially flat year on year.
On the bright side, AGL told investors that it provided 4.7 million total customer services, an improvement of 108,000.
Investors seem happy with what AGL had to say for itself, though. That's judging by the fact that, at the time of writing, the AGL share price is up a jubilant 9.3% to $9.68.
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AGL shares surge amid dividend hike
But let's talk about AGL's dividend. Over the past decade, AGL hasn't exactly endeared itself to ASX income investors. The company went from paying out $1.19 per share in 2019 to 26 cents per share in 2022 – a huge income cut that shareholders had to absorb.
However, the trend has been far more positive in recent years, and today's earnings do nothing to change that.
AGL has revealed that its next dividend will be an interim payment worth 24 cents per share, alone worth almost as much as 2022's full-year total. This dividend will come with full franking credits attached, in line with the company's 2025 payments.
This dividend represents a 4.35% rise over last year's interim dividend, worth 23 cents per share. Together with AGL's final dividend of 2025, worth 25 cents per share, it takes the company's 12-month total to 49 cents per share.
Today, AGL shares are already trading on a hefty trailing dividend yield of 4.96% (it was 5.42% at AGL's closing price yesterday). But this dividend hike means that the company can also be given a forward dividend yield of 5.06%. That grosses up to 7.23% with the value of AGL's full franking credits.
Foolish Takeaway
As we've already touched on, AGL is not the reliable dividend stock it once was. It is at the centre of Australia's ongoing energy transition, which has caused the company financial pain in the past and might do so again. Saying that, the company's finances have stabilised remarkably over the past few years, and AGL's hefty dividend yield (almost double CBA's right now) is arguably worth considering as part of a diversified income portfolio today.
