Coles dividend: Everything you need to know about the new supersized payout

A record payout is coming investors' way.

| More on:
A person is weighed down by a huge stack of coins, they have received a big dividend payout.

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

Well, one of the biggest pieces of news on the ASX boards today is the latest earnings report from Coles Group Ltd (ASX: COL). This morning, Coles reported its half-year earnings for the six months to 31 December, as well as revealing a new dividend

Investors have been impressed, to say the least.

As we went through this morning, Coles' earnings couldn't be more different to those of its arch-rival Woolworths Group Ltd (ASX: WOW), which we got a look at just yesterday.

The ASX 200 blue-chip stock and grocery giant reported revenues of $23.04 billion for the period, up 3.7% year-on-year. Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at $2.14 billion, a 12.5% improvement. That helped Coles' underlying net profit after tax (NPAT) to shoot up 6.4% to $666 million (nothing superstitious there).

So all smiles for Coles for its first half of the 2025 financial year.

But let's talk dividends.

Coles announces 2.8% dividend pay rise

These increases in earnings and profits helped allow Coles to reveal an interim dividend of 37 cents per share to kick off 2025. Like all of Coles' dividends since 2018, this will come with full franking credits attached. 

Coles reported an earnings per share (EPS) metric of 43.1 cents for the half year. As such, this dividend represents a payout ratio of 85.85% of those earnings.

This latest dividend represents a 2.8% pay rise over the interim dividend worth 36 cents per share that investors enjoyed last year. It's also the highest interim dividend investors have enjoyed since Coles shares were spun out of Wesfarmers Ltd (ASX: WES) back in 2018.

Coles has nominated 5 March next month as this payout's ex-dividend date. As such, any investor who wishes to receive this dividend but doesn't yet own any Coles shares has until the market close next Tuesday, 4 March, to buy shares. Anyone who buys the stock on 5 March or later won't get the rights to receive this dividend attached to their shares.

For those eligible investors, dividend payday will then come around on 27 March.

Eligible investors have until close of business on Friday, 7 March, to nominate for Coles' optional dividend reinvestment plan (DRP). If investors opt in to the DRP, they can receive additional Coles shares for this dividend in lieu of the traditional cash payment.

Coles shares have responded well to today's earnings, with the supermarket operator currently (at the time of writing) up 5.5% at $20.77 after hitting a new record high of $20.64 this morning.

At this share price, Coles is trading on a trailing dividend yield of 3.27%. If we factor in the company's newest payout, Coles stock would have a forward dividend yield of 3.32%.

Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

A senior couple discusses a share trade they are making on a laptop computer
Dividend Investing

1 ASX dividend stock down 54% I'd buy right now

This business could build good returns for investors.

Read more »

A woman wearing glasses and a black top smiles broadly as she stares at a money yarn full of coins representing the rising JB Hi-Fi share price and rising dividends over the past five years
How to invest

How much do I need to invest in ASX shares for $20,000 a year in passive income?

We look at three top ASX dividend shares to earn a $20,000 annual passive income stream.

Read more »

A happy elderly woman smiles and cheers as she looks at good investment news on her laptop.
Retirement

3 ASX dividend shares paying more than the pension in retirement

How much money would you need to have invested to receive more in ASX dividends than the pension?

Read more »

A happy older couple relax in a hammock together as they think about enjoying life with a passive income stream.
Dividend Investing

Here's why I own these 3 ASX dividend shares for passive income

These companies pay me handsomely to own them.

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Dividend Investing

With a yield of 6.9%, how much upside does Macquarie tip for APA Group shares?

Let's see what the broker is saying about this high-yield dividend stock.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Dividend Investing

Buy Telstra and this top ASX dividend stock

Brokers have given the thumbs up to these income options this week.

Read more »

A woman wearing glasses and a black top smiles broadly as she stares at a money yarn full of coins representing the rising JB Hi-Fi share price and rising dividends over the past five years
Dividend Investing

Why I think these 2 ASX dividend shares offer great buying right now

These stocks offer potential for major dividend income.

Read more »

Hand of a woman carrying a bag of money, representing the concept of saving money or earning dividends.
Dividend Investing

Buy these excellent ASX dividend stocks for a big income boost

Brokers think these stocks could be top picks for income investors.

Read more »