Own AMP shares? Here's what you have to look forward to in September

It's almost dividend time for the ASX financial share.

| More on:
A middle-aged woman sits in contemplation over a tablet device considering information about ASX shares and deep in thought.

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

Owners of AMP Ltd (ASX: AMP) shares will soon be getting their dividends paid into their bank accounts.

I really like receiving dividends because it's an effortless way to reap returns. In fact, investors don't really need to do anything at all to get regular 'real' returns paid into their bank accounts.

Businesses are doing their best to make a profit each year, and some companies then share that profit with shareholders in the form of dividends.

That said, let's check what's ahead for AMP shareholders.

Upcoming AMP dividend

The ASX financial share has already gone ex-dividend, meaning new investors can't gain entitlement to the company's upcoming dividend any more.

For people who owned AMP shares before the ex-dividend date of 23 August 2023, they're on track to receive AMP's FY23 half-year dividend of 2.5 cents per share.

Investors who wanted to take part in the dividend re-investment plan (DRP) had until 25 August 2023 to elect to do so. This is where shareholders can decide to receive new shares rather than a cash payment.

At the current AMP share price, the interim dividend amounts to a partially franked dividend yield of 2%. That's not bad for a half-year payment from a business some investors say is struggling.

How big could the full-year payout be?

AMP has now paid a dividend for two half-year results in a row. Perhaps it may have returned to making regular payments to shareholders after a payout hiatus during most of the COVID-19 period.

The current projection on Commsec is that the business will continue with a 2.5 cents per share payout for the FY23 final dividend as well. That would bring the full 2023 financial year dividend to 5 cents per share.

At the current AMP share price, that suggests a partially franked dividend yield of 4% for investors.

Are AMP shares attractive?

The ASX financial share has been through significant volatility over the last 12 months, as we can see on the chart below.

Created with Highcharts 11.4.3Amp PriceZoom1M3M6MYTD1Y5Y10YALL30 Aug 202230 Aug 2023Zoom ▾Sep '22Nov '22Jan '23Mar '23May '23Jul '23Oct '22Oct '22Jan '23Jan '23Apr '23Apr '23Jul '23Jul '23www.fool.com.au

However, its segments are seeing the underlying performance improve. In the first half of FY23, AMP Bank grew underlying net profit after tax (NPAT) by 23.9% to $57 million. Over the same period, the company's platforms segment generated 25.7% growth of underlying NPAT to $44 million. AMP's advice division improved its net loss by $5 million to a loss of $25 million.

Commsec estimates suggest the business could make earnings per share (EPS) of 7.1 cents. This would mean the price/earnings (P/E) ratio for FY23 is 17. But, by FY25, it could make EPS of 10.2 cents. That's a forward P/E ratio of 12.

According to analyst recommendations collated by Commsec, the ASX financial share is rated as a buy by two analysts, a sell by two analysts, while five analysts think it's a hold. Perhaps this suggests the AMP share price isn't going to do that much in the shorter term.

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

Woman and man calculating a dividend yield.
Financial Shares

Australian insurance sector: Does Macquarie prefer IAG or Suncorp shares?

Here’s an expert’s views on the insurance sector.

Read more »

A woman sits on a chair smiling as she shops online.
Financial Shares

Which ASX 200 financial share delivered better returns in FY25: IAG, AMP, or Zip?

We compare share price movements and dividend payments for these 3 ASX 200 financial stocks.

Read more »

a man sits in unhappy contemplation staring at his computer on his desk in a home environment, propping his chin on his hand.
Financial Shares

Did Suncorp or QBE insurance shares perform better in the last year?

These insurance providers brought solid returns for investors in the last 12 months. 

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Financial Shares

Up 58% since April, this ASX 200 financial stock just reported record results

The ASX 200 wealth management and technology company has been on a tear since April. Here’s the latest.

Read more »

A young woman smiles as she rides a zip line high above the trees.
Financial Shares

5 best ASX 200 financial shares of FY25 (CBA didn't make the cut!)

These stocks were well and truly 'in the black' for share price growth last financial year.

Read more »

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

Does Macquarie rate IAG Insurance shares a buy, hold or sell?

The insurer's share price has slumped this week.

Read more »

Worried woman calculating domestic bills.
Financial Shares

What's the outlook for household deposit growth for the big 4 banks?

Household deposit growth has accelerated over the past two years.

Read more »

A man looking at his laptop and thinking.
Broker Notes

After crashing more than 21% yesterday, does Macquarie rate Helia shares a buy?

Should I buy the big dip on Helia shares? Here’s Macquarie’s latest share price forecast.

Read more »