Dividend boost sends Netwealth shares 13% higher

Netwealth Group Ltd (ASX: NWL) delivered another dividend increase after a strong first-half performance. The result has sent the company’s shares sharply higher in afternoon trade.

At the time of writing, the Netwealth share price is up 13.22% to $25.27.

The wealth platform provider lifted its interim dividend by 20% after delivering double-digit earnings growth.

The board declared a fully-franked interim dividend of 21 cents per share, up from 17.5 cents a year earlier. That increase closely tracks earnings per share (EPS) growth of 20.5% to 28.1 cents.

Shares will trade ex-dividend on 4 March 2026, with payment scheduled for 26 March.

Strong inflows drive earnings growth

Funds under administration (FUA) climbed 23.6% year on year to $125.6 billion. Net inflows remained strong, with $16.6 billion of FUA inflows recorded during the half. That growth fed directly into revenue, with total income rising 24.7% to $193.8 million.

EBITDA increased 23.9% to $96.7 million, while margins remained high at 49.9%. Although this was slightly below last year’s level due to ongoing investment, the company is still operating near the 50% mark.

Earnings growth was matched by strong operating cash flow. Netwealth continues to benefit from a largely recurring revenue base, which provides visibility as it expands.

Expanding the platform while lifting profits

During the half, the company increased operational headcount to 791, adding 74 roles across product, technology, and service functions. Management said the investment is aimed at strengthening the platform and supporting adviser growth, rather than chasing short-term margin gains.

Even with that investment, profitability remains robust. The company reiterated that it expects FUA net flows in FY26 to remain broadly consistent with FY25 levels and EBITDA margins to stay around current levels, excluding specific First Guardian-related expenses.

Earnings growth now flowing to shareholders

Netwealth has long been viewed as a growth company, but the rising dividend shows that the business is now evolving. With greater scale now in place, additional revenue is flowing through at healthy margins.

The platform is still capturing market share, expanding its adviser network, and increasing account balances. At the same time, strong recurring revenue and solid cash conversion are supporting a growing payout to shareholders.

The 20% increase in the interim dividend is a clear sign of that progress. The company is generating cash, reinvesting in the business, and still returning more profits along the way.

If adviser growth and net inflows remain steady in the second half, further dividend growth would not be a surprise.

The post Dividend boost sends Netwealth shares 13% higher appeared first on The Motley Fool Australia.

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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 positions in and has recommended Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.