Will AMP shares regain their dividend sparkle in 2023?

AMP Ltd (ASX: AMP) shares were once an S&P/ASX 200 Index (ASX: XJO) dividends favourite. But that was many years ago.

The last time investors saw a regular payout from the financial services stock was in March 2019.

Meanwhile, the AMP share price has tumbled 75% over the last five years to trade at $1.32 today.

At the same time, the ASX 200 has gained 21.5%.

But AMP is a vastly different company today than it was in 2019. In fact, it’s currently in the process of selling its funds management business and will return $1.1 billion to shareholders.

Does that mean the company is approaching its return to dividends? Let’s take a look.

Could 2023 be the year AMP shares regain a dividend?

Sadly, as patient as investors have been, they’re no closer to knowing when AMP’s next regular dividend will come.

Though, management says they’re working on it. Speaking at the company’s 2022 annual general meeting, chair Debra Hazelton said:

We acknowledge the disappointing shareholder experience – in terms of share price and a lack of dividends – reflecting a period of disruption in the financial services industry, and internally within AMP.

The company was scathed by 2018’s Financial Services Royal Commission, which left a notable reputational and financial dint.

In the aftermath, AMP launched a transformation program to improve its performance by increasing profits and reducing costs. And it appears to have made good progress.  

The company’s most recent full-year results saw a 53% increase in underlying after-tax profits, reaching $356 million. However, its statutory post-tax profits came in at a $252 million loss, down from a $177 million profit in the prior year.

Additionally, AMP plans to return to shareholders most of the proceeds from its sale of Collimate Capital. Having said that, the sale of Collimate Capital’s domestic real estate and infrastructure equity business might be up in the air if Chinese regulatory approval isn’t received by the end of February.

Hazelton continued in May:

At the conclusion of these activities, we will review our regular dividend policy. We intend to hold a strong capital position and balance sheet as we head into this period of global economic uncertainty.

So, long-suffering investors might not have to wait much longer to realise a dividend from AMP shares. Though, whether a payout will be declared in 2023 is hard to say.

The post Will AMP shares regain their dividend sparkle in 2023? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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 no position in any of the stocks mentioned. 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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