Guess which ASX 200 share is trading ex-dividend next week

Metcash Limited (ASX: MTS) shares are rapidly approaching the ex-dividend date. This is the date where the S&P/ASX 200 Index (ASX: XJO) share’s owners will be allocated the upcoming dividend, but new shareholders will miss out.

The ex-dividend date is 20 December 2022, so investors wanting the dividend will need to own shares before then.

How much is Metcash going to pay as a dividend?

In its FY23 half-year result, the company announced that it had declared an interim dividend of 11.5 cents per share, which was a 9.5% year-over-year increase.

This dividend came after a 13.7% increase in underlying earnings per share (EPS) to 16.6 cents. The company is paying around 70% of its underlying net profit after tax (NPAT) as a dividend to investors.

An 11.5 cents per share dividend enables the company to pay out an attractive amount of cash flow, while still having plenty to re-invest back into the business for more growth and efficiencies.

Metcash says it has a continued focus on delivering “superior shareholder returns”, which is why it has a target dividend payout ratio of 70% underlying net profit.

How big will the full-year dividend be?

The broker Citi’s numbers suggest that Metcash shares could pay a full-year dividend of 22.5 cents per share, which would translate into a grossed-up dividend yield of 7.5%.

This half-year dividend alone amounts to a grossed-up dividend yield of 3.8% from the ASX 200 share.

With Metcash having a dividend payout ratio that’s fixed to the performance of its profit, the performance of that profit will be key for future payouts.

In the first four weeks of the second half of FY23, the company continued to see growth.

Metcash’s food segment has seen sales growth of 4%, or 10.6% excluding tobacco, reflecting “strong demand” and inflation.

Hardware total sales increased by 8% year over year. There has been a contribution from both acquisitions and inflation, though adverse building conditions have been a headwind.

Liquor total sales increased by 8.9% year over year thanks to a “continuation of strong demand across retail stores and on-premise customers”.

Metcash share price snapshot

Over the last month, Metcash shares have risen by around 8%.

The post Guess which ASX 200 share is trading ex-dividend next week appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 recommended Metcash. 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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