Owners of Wesfarmers Ltd (ASX: WES) shares can get excited because the passive income payment is noticeably up compared to last year. The Wesfarmers dividend increase is funded by a good rise in earnings in the FY26 first-half result.
The company reported that revenue grew 3.1% to $24.2 billion, and operating profit (EBIT) climbed 8.4% to $2.5 billion. The net profit after tax (NPAT) and earnings per share (EPS) both climbed by 9.3%, to $1.6 billion and $1.41, respectively.
Let’s look at what’s happening with the payout.
Wesfarmers dividend
The Kmart and Bunnings owner decided to declare an increased interim dividend per share of $1.02 per share, up 7.4%. The payout is fully franked.
This payment represents a dividend payout ratio of 72% of the EPS, which balances rewarding shareholders with retaining some profit to reinvest in its operations.
The board of directors decided on the level of the dividend based on the available franking credits, current earnings, cash flows, future cash flow requirements and targeted credit (balance sheet) metrics.
Wesfarmers also said it’s maintaining a focus on maximising the value of franking credits for shareholders.
When will the payout hit bank accounts?
Owners of Wesfarmers shares will receive the interim dividend on 31 March 2026, which is not that far away.
If investors want to receive this payment, they need to own shares by the ex-dividend date of 24 February 2026. That means investors need to buy shares by the end of the previous trading day, which is 23 February 2026 (next Monday).
Investors can also decide to take part in the dividend re-investment plan (DRP) if they want to receive the Wesfarmers dividend as new shares rather than cash. Shareholders who want to take part in the DRP must elect to do so by 8pm on 26 February 2026.
The DRP price for Wesfarmers shares will be calculated based on the 15 trading days between 2 March 2026 to 20 March 2026. There won’t be a discount for any shares issued.
Outlook for further Wesfarmers dividend growth
The business said that sales growth has started well in the second half of FY26, with Bunnings and Officeworks delivering sales growth that was broadly in line with the first half of FY26, while Kmart Group sales growth was stronger compared to the first half.
I think it’s also helpful that the lithium operations are producing resources now, it’s not just a burden on the company’s cash flows in the setup phase.
Overall, there are promising signs for further dividend growth in FY26.
The post Everything you need to know about the latest Wesfarmers dividend appeared first on The Motley Fool Australia.
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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 positions in and has recommended Wesfarmers. 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.