Treasury Wine share price defies market slump. Could it be the dividend boost?

It hasn’t been a very pleasant day of trading thus far for ASX shares and the S&P/ASX 200 Index (ASX: XJO). At the time of writing, the ASX 200 has lost 0.29% to around 7,105 points. But it’s a different story when it comes to the Treasury Wine Estates Ltd (ASX: TWE) share price.

Treasury Wine shares are well into green territory as it stands. The winemaker is currently going for $12.87, up 1.9% for the day so far.

This comes after an initial dip upon market open this morning, which saw the company drop as low as $12.02 a share.

No doubt this indecisiveness from investors has something to do with the full-year earnings results for FY 2022 that the company released this morning.

As my Fool colleague James went through at the time, Treasury’s report was a little ahead of market expectations.

The company reported a 3.6% drop in net sales revenue to $2.48 billion, but a 2.6% rise in earnings before interest, tax, SGARA and material items (EBITS) to $523.7 million. Net profit after tax before material items and SGARA also rose, up 4.2% to $322.6 million.

Is the new dividend lifting the Treasury Wine share price today?

But let’s talk about Treasury’s new dividend, which has certainly given income investors something to be pleased about.

Treasury announced a final and fully franked dividend of 16 cents per share for FY 2022. Treasury shares will trade ex-dividend for this payment on 31 August. Investors will receive the cash (or extra shares if the optional dividend reinvestment plan is preferred) on 30 September.

This 16 cents per share payment is a pleasing increase over FY 2021’s final dividend of 13 cents per share. It also beats the company’s last interim dividend from April, which was worth 15 cents per share.

However, it is not the highest dividend ever paid out by Treasury. For that, one would have to look back to the pre-COVID dividends of 20 cents per share that investors were receiving back in 2019 and early 2020.

So we now know that Treasury Wine shares will be paying out a total of 31 cents per share for FY 2022.

On the current Treasury Wine Estates share price, that works out to be worth a yield of 2.43%. The company’s trailing yield (which includes last year’s final dividend instead of this year’s) is currently 2.2%. Perhaps this is helping investors get excited about Treasury Wine shares today.

The post Treasury Wine share price defies market slump. Could it be the dividend boost? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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