The Wesfarmers (ASX:WES) dividend has jumped by 17%

A solid financial result will see a generous dividend paid out to Wesfarmers shareholders.

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The Wesfarmers Ltd (ASX: WES) dividend is on the rise after the company released its FY21 results this morning.

Wesfarmers growth momentum continues in FY21

Wesfarmers delivered a well-rounded result despite concerns that sales would moderate significantly in the second half. Key financial highlights include:

Wesfarmers managing director Rob Scott commented on the company's core retail businesses saying:

Bunnings, Kmart Group and Officeworks delivered strong sales and earnings growth for the year. While customer demand remained resilient, sales growth in Bunnings, Officeworks and Catch moderated from mid-March as the businesses began to cycle elevated demand following the onset of COVID-19 in the prior year.

Pleasingly, sales growth from mid-March remained strong on a two-year basis across all of the Group's retail businesses.

However, the Wesfarmers growth trajectory might face some hurdles in the near term, with management noting:

Given the impact of lockdowns in recent months and the prospect of continued trading restrictions, earnings in the Group's retail businesses during the first half of the 2022 financial year may be below the prior corresponding period.

Wesfarmers dividend jumps 17%

Wesfarmers' directors determined the company would pay a full-franked final ordinary dividend of 90 cents per share, reflecting the company's strong profit performance and dividend policy of distributing franking credits to shareholders.

This brings the company's total FY21 fully-franked ordinary dividend for the full year to 178 cents per share, up 17.1% on FY20.

At today's prices, this represents a dividend yield of approximately 2.78%.

Wesfarmers also announced a proposed return of capital to shareholders of $2.00 per share, subject to approval by Wesfarmers shareholders at its October annual general meeting.

Key dates for Wesfarmers dividend

The Wesfarmers share price will go ex-dividend on Wednesday, 1 September and be paid out on Thursday, 7 October.

Motley Fool contributor Kerry Sun 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 Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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