Here's everything you need to know about the IAG (ASX:IAG) dividend

IAG is on course to reward investors next month.

| More on:
A woman steps into a friend's umbrella after hers blows away.

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

Key points

  • IAG reported a mixed performance for H1 FY22, impacted by severe weather events
  • The board declared an unfranked interim dividend of 6 cents per share
  • Investors will need to own IAG shares by today to be eligible for the latest dividend

The Insurance Australia Group Ltd (ASX: IAG) share price has shot up since delivering its FY22 half-year results last Friday.

At yesterday's market close, IAG shares finished 0.42% higher at $4.74. That means its shares have gained almost 7% in the past week for investors.

In context, the S&P/ASX 200 Index (ASX: XJO) edged 0.51% lower to 7,206.9 points on Tuesday.

What's the go with the IAG dividend?

In the half-year report for the 2022 financial year, IAG reported a mixed performance across key metrics.

In summary, gross written premium (GWP) lifted by 6.2% to $6,570 million over the previous corresponding period. This was primarily driven by new customer growth and strong retention across motor and home lines in the Australian business.

Insurance profit, however, tumbled by 57.7% to $282 million over H1 FY21. The sharp fall was attributed to significant natural peril costs largely from severe weather events in October.

Overall, net profit after tax (NPAT) rose to $173 million, compared to a loss of $460 million in the prior year.

Based on IAG's cash earnings of $176 million, the IAG Board declared an unfranked interim dividend of 6 cents per share. This represents a 14.2% decline from the 7 cents declared in the prior comparable period.

Management noted that the latest dividend equates to a payout ratio of 84% of cash earnings.

The company's dividend policy is to distribute 60%-80% of cash earnings in any full financial year.

When can IAG shareholders expect payment?

IAG will pay the interim dividend to eligible shareholders next month on 24 March.

However, to be eligible, you'll need to own IAG shares before the ex-dividend date which is today, 16 February. This means if you want to secure the dividend, you will need to purchase IAG shares by today at the latest.

In addition, the company is offering a dividend reinvestment plan (DRP), with the election date falling on 18 February.

The issue price per share will be the average market price, with no discount for participants. Shares allocated under the DRP are likely to be purchased on-market.

Motley Fool contributor Aaron Teboneras 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 and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Financial Shares

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
Financial Shares

2 rising ASX financial shares with 'meaningful upside' still left: fundie

Financials outperformed every other sector in FY25, but there are still buying opportunities left, say these experts.

Read more »

Frustrated and shocked business woman reading bad news online from phone.
Financial Shares

Macquarie shares sink 5% on Q1 update

The investment bank is having a tough start to the year.

Read more »

A man holds his baby on his lap at the dining room table while he looks at his laptop screen earnestly.
Financial Shares

After its result, does Macquarie rate AMP shares a buy, hold or sell?

The financial services company released a strong second-quarter update on Monday.

Read more »

A blockchain investor sits at his desk with a laptop computer open and a phone checking information from a booklet in a home office setting.
Broker Notes

Are non-bank lenders a lucrative alternative to the big 4 banks?

The big 4 banks are widely perceived as being fully valued or overvalued.

Read more »

Red sell button on an Apple keyboard.
Financial Shares

ASX 200 financials was the best sector of FY25. But it's time to sell these 2 stocks, say experts

The ASX 200 financials sector gave investors a near-30% total return in the 2025 financial year.

Read more »

Happy woman working on a laptop.
Financial Shares

AMP share price jumps on strong Q2 update

Let's see what the financial services company reported for the quarter.

Read more »

A woman holds up hands to compare two things with question marks above her hands.
Financial Shares

The pros and cons of buying IAG shares this month

Is this the right time to invest in the insurance giant?

Read more »

man analysing share price
Financial Shares

ASX 200 financial services rivalry: Should I buy Hub24 or Netwealth shares?

Let's compare the pair.

Read more »