The AMP dividend is back! Here's what you need to know

Investors don't seem excited by the prospect of a dividend from AMP.

| More on:
Female ASX travel shares investor with surprised expression drinks a cup of tea while reading the newspaper at her desk

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

  • AMP has decided to pay a dividend with its FY22 result
  • It's announced a 2.5 cents per share dividend payment
  • The business is planning to return more capital to investors in 2023

The AMP Limited (ASX: AMP) share price is down 13%, with the market not impressed by the FY22 result despite the ASX financial share announcing that it was going to pay a dividend.

It has been a painful few years for shareholders, with AMP profits sinking following the Royal Commission into financial advice.

AMP has finally announced a dividend for investors. Yet, a return to making a statutory net profit after tax (NPAT) in the FY22 report was not enough to impress the market.

What was in the AMP result?

AMP revealed that it made a statutory NPAT of $387 million, a turnaround from the $252 million loss in FY21.

However, the underlying NPAT dropped from $280 million to $184 million. The company said this was a result of assets under management (AUM) suffering due to volatile investment markets, repricing in its wealth management businesses, and a weaker net interest margin (NIM) for AMP Bank.

AMP dividend

AMP hadn't paid a dividend to shareholders for a few years, but the ASX financial share declared a final dividend for the 2022 financial year of 2.5 cents per share, with franking of 20%.

At the current AMP share price, that represents a partially franked dividend yield of 2.2%.

This is part of the company's $1.1 billion plan to return capital to shareholders. In FY22, it delivered $267 million of a targeted $350 million share buyback.

This dividend amounts to around $75 million.

Will there be future AMP dividends?

AMP didn't give much guidance about dividends in FY23.

It said that returning capital to shareholders remains one of its "key strategic priorities for 2023".

But, the company did say that it continues to maintain a conservative approach to capital management to support the transformation of the business and maintain balance sheet strength.

It intends to return the $1.1 billion as a result of previously announced business sales.

While AMP is unlocking value for shareholders by divesting parts of the business, I think it's likely that (some of) the cash could be sent shareholders' way through a combination of dividends and share buybacks.

But, in terms of paying dividends from AMP's ongoing operations, I think the focus will be on AMP ensuring that it can create a sustainable future and retaining profit for re-investment.

Before today's result, estimates on Commsec suggested that AMP might pay an annual dividend per share of 4 cents in FY23 and 5.2 cents in FY24.

At the current AMP share price, excluding the impact of possible franking credits, that could be a dividend yield of 3.5% in FY23 and 4.6% in FY24.

Motley Fool contributor Tristan Harrison 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Financial Shares

A man holds his head as he looks at his laptop and contemplates more bills to pay.
Financial Shares

Down 19%! Is the GQG share price selloff an overreaction and buying opportunity?

Is now the time to pounce on this beaten down stock? Let's see what Goldman Sachs is saying.

Read more »

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

IAG share price reaches new 5-year high! What next?

It’s been a great period for the insurance giant. Could it keep rising?

Read more »

Shot of a young businesswoman looking stressed out while working in an office.
Financial Shares

This $7 billion ASX 200 stock just crashed 11%. What's going on?

There's trouble in India and it's weighing on this stock today.

Read more »

A happy male investor turns around on his chair to look at a friend while a laptop runs on his desk showing share price movements
Financial Shares

Here's what this top broker is saying about Macquarie shares

Is this investment bank heading to a new record high?

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Financial Shares

Up 25% in a year, why this ASX All Ords stock has 'plenty more upside'

Analysts think this stock could still have plenty of gas left in its tank.

Read more »

Two people climb to the summit and raise their arms in success as the sun rises brightly over the mountains.
Financial Shares

'Strong momentum': 2 ASX financial shares backed by top fundie for 2025

ASX financial shares had a strong trading session on Tuesday with several new price records set.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Financial Shares

AMP shares on radar as M&A spotlight shines bright

The stock has rallied hard in 2024.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Financial Shares

Are IAG shares still a buy for dividends at a 5-year high?

Here's my take on IAG's place in an income portfolio today.

Read more »