The Bapcor (ASX:BAP) dividend bumps up 14%

What's the new Bapcor dividend worth today?

| More on:
a mechanic wipes his forehead under a car with tool in hand and looking at car parts.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Bapcor Ltd (ASX: BAP) was one of the ASX companies that reported its FY2021 earnings numbers to the markets yesterday.

The Bapcor share price didn't exactly react the way investors might have hoped, with the auto parts company's shares falling 4.56% by yesterday's close. Today, the selling has continued, with Bapcor shares down another 1.36% at the time of writing to $7.595 a share.

There were many interesting tidbits in yesterday's earnings, which my Fool colleague James covered yesterday. In summary, Bapcor delivered a revenue increase of 20.4% to $1.76 billion, a 28.8% bump in pro forma earnings before interest, tax, depreciation and amortisation (EBITDA), and a 46.5% rise in pro forma net profit after tax to $130.1 million.

The company also increased its final dividend to 11 cents per share, fully franked. That means Bapcor will pay a total dividend of 20 cents per share for the full year, which is up 14.3% year on year.

Bapcor's dividend puts company on a good path

This latest dividend continues the path Bapcor has been on for a few years now. This company has now managed to raise its annual dividend every single year since 2015. Back then, Bapcor paid out an interim dividend of 4 cents per share in April, as well as a final dividend of 4.7 cents per share in September.

In contrast, 2021 has seen Bapcor pay an interim dividend of 9 cents per share in March already. And we now know that investors will receive their second 2021 dividend of 11 cents per share on 14 September.

That dividend growth rate represents a compounded annual growth rate of 14.88% since 2015 for Bapcor.

And since the company told us yesterday that it earned 38.3 cents in pro forma earnings per share (EPS) for FY21, we can place this dividend at an earnings payout ratio of 52.2%.

Since Bapcor managed to grow its EPS by 26.8%, but its full-year dividends by 'only' 14.3%, this means that Bapcor has managed to raise its dividend and lower its payout ratio at the same time. That's often good news for future dividend payments.

About the company's share price

Bapcor shares are, on today's pricing, up a solid 10.36% over the past 12 months. However, year to date, the story is a little different. Bapcor remains down 2.62% in 2021 so far, vastly underperforming the broader S&P/ASX 200 Index (ASX: XJO), which is up 11.3% over the same period.

Over the past 5 years, Bapcor shares have appreciated by 19.54%, against the ASX 200's 34.6%.

At the current Bapcor share price, the company has a market capitalisation of $2.59 billion, and a price-to-earnings (P/E) ratio of 24.55. Bapcor's trailing dividend yield presently stands at 2.43%.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Dividend Investing

Happy young woman saving money in a piggy bank.
Dividend Investing

How to make $10,000 of passive income a year

Here's how to make the share market your own personal ATM.

Read more »

Blue chips with stock written on them.
Dividend Investing

2 ASX blue-chip shares offering big dividend yields

These businesses have a lot to offer income-focused investors.

Read more »

Woman laying with $100 notes around her, symbolising dividends.
Dividend Investing

How much dividend income does the average ASX investor earn?

It's an impressive amount!

Read more »

Person holding Australian dollar notes, symbolising dividends.
Dividend Investing

Which ASX 200 sector paid the best dividends in FY25?

We reveal the dividend returns of each of the 11 market sectors in FY25.

Read more »

A young woman sits at her desk in deep contemplation with her hand to her chin while seriously considering information she is reading on her laptop.
Dividend Investing

Are CBA shares still a good buy today for passive income?

Looking to earn passive income from ASX dividend stocks? Here’s my take on CBA shares.

Read more »

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Dividend Investing

Where to invest $50,000 in ASX dividend shares

Let's see why these shares could help income investors build a strong portfolio.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Dividend Investing

2 Australian stocks with ultra safe dividend yields

These businesses have paid consistently-growing dividends for decades.

Read more »

Happy man holding Australian dollar notes, representing dividends.
Dividend Investing

$500 buys me 233 shares in this 10%-yielding income stock!

Macquarie expects this stock to offer big yields.

Read more »