Reporting season continues, but there are some ASX dividend shares that just increased the dividend to shareholders.
Some businesses have seen a lot of growth in this strange environment because of COVID-19. Time will tell whether that continues or not.
But the leadership decided to increase dividend payouts from these two businesses:
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JB Hi-Fi Limited (ASX: JBH)
JB Hi-Fi is one of Australia's biggest retailers. According to the ASX, it currently has a market capitalisation of $5.7 billion.
Total sales increased by 12.6% to $8.9 billion, whilst net profit after tax (NPAT) grew 67.4% to $506.1 million and earnings per share (EPS) rose 67.5% to 440.8 cents. Online sales grew by 78.1% over the year to $1.1 billion.
The Good Guys in-particular saw a large increase in profitability, which saw the earnings before interest and tax (EBIT) improve 318 basis points to 7.9%. The gross profit margin increased 189 basis points to 22.4% and the cost of doing business margin improved 100 basis points to 11.7%.
With that profit, the ASX dividend share decided to declare a final dividend of $1.07 per share – an increase of 18.9%. That brought the total dividend for FY21 to $2.87 per share, up 51.9%.
That payment of the annual dividend represented 65% of net profit after tax (NPAT).
However, in a trading update for FY22 to 15 August 2021, it saw JB Hi-Fi Australia sales fall 14.6% and The Good Guys saw a decline of 8.1%.
The broker Credit Suisse rates JB Hi-Fi as a buy, with a price target of $56.48. In FY22, Credit Suisse is projecting JB Hi-Fi will pay a grossed-up dividend yield of 6.7% at the current JB Hi-Fi share price.
Accent Group Ltd (ASX: AX1)
The footwear ASX dividend share revealed sizeable growth in FY21. Total sales rose 19.9% to $1.14 billion.
Accent's EBIT grew 32.1% to $124.9 million, NPAT increased 38.6% to $76.9 million and EPS went up 38.2% to 14.21 cents.
That growth gave the board the confidence to increase the full year dividend by 21.6% to 11.25 cents. At the current Accent share price, after falling 18% since 13 August 2021, it has a FY21 grossed-up dividend yield of 7.4%.
Accent's EBIT grew 32.1% to $124.9 million, NPAT increased 38.6% to $76.9 million and EPS went up 38.2% to 14.21 cents billion. Online sales grew 48%, representing 20.9% of total FY21 sales. It is aiming for online to be 30% of sales over time.
The company continues to target a growing store portfolio. It opened 90 new stores during the year and closed seven stores where required rent outcomes could not be achieved. Including the acquisition of Glue Store, the total store number grew to 638. New stores are performing strongly on more favourable rents than the existing portfolio.
The ASX dividend share said that in the first seven weeks of FY22, sales, including online, were down 16% compared to the prior corresponding period. However, digital sales continue to grow – in the last three weeks digital sales were up 66.7%.
It's still aiming for at least 10% compound EPS growth and wants to be defined by its retail innovation, cash conversion and growing returns on shareholder funds.
According to the forecast on Commsec, Accent will pay a fully franked dividend of 12.3 cents per share in FY23. That equates to a grossed-up dividend yield of 8.1%.
