One of the most popular areas of the market for income investors is of course the banking sector.
Of the big four banks, the Westpac Banking Corp (ASX: WBC) dividend would have to be my favourite of the bunch. Here's everything you need to know about its dividend:
The yield.
Based on the last close price, Westpac's shares provide a trailing fully franked $1.88 per share dividend. This works out to be a 6% yield, compared to the market-average yield of 3.8%.
It is also superior to rivals Australia and New Zealand Banking Group (ASX: ANZ) and Commonwealth Bank of Australia (ASX: CBA). The shares of these two banks currently provide trailing 5.6% and 5.3% dividends, respectively.
Will its dividend grow?
There have been concerns that the bank levy would lead to the banks needing to cut their dividends in order to maintain robust balance sheets.
After all, Westpac has estimated that the levy will impact its business by around $260 million after tax on an annualised basis.
However, many leading brokers are not concerned by this and believe Westpac is in a position to grow its dividend in FY 2018. Analysts at UBS, for example, have forecast a full-year dividend of $2.01 per share in FY 2018.
This equates to a fully franked forward yield of 6.4% for the bank's shares.
When are its dividends paid?
There's still plenty of time for income investors to get on board. Westpac's shares traditionally go ex-dividend for its interim dividend during the second week of May. This interim dividend is then paid to shareholders approximately six weeks later.
After which, its shares generally go ex-dividend for its final dividend in early to mid-November. This is then paid to shareholders traditionally in the week before Christmas, just in time to fund those last minute shopping trips.
