Friday, 2 high yield ASX All Ords shares trade ex-dividend
It’s a big week for ASX dividend investors because BHP Group Ltd. (ASX:BHP) is preparing to pay a colossal US$8.9 billion in fully franked dividends tomorrow to eligible shareholders.
BHP shares have already passed their ex-dividend date, so those dividends are no longer on the table.
But there are other companies in the S&P/ASX All Common Index (ASX: XAO) that have not yet been ex-dividend.
In particular, two ASX All Ords shares will go ex-dividend on Friday. Since the ASX is closed tomorrow, today will be the last day to collect the final dividends from these ASX All Ords stocks.
Both of these ASX All Ords stocks are posting significant dividend yields. So don’t be surprised to see their stock price in the red on Friday as the value of their respective dividends leaves their stock price.
Latitude Group Holdings Ltd (ASX:LFS)
First, consumer finance firm Latitude will trade Friday without a fully franked interim dividend of 7.85 cents per share.
Investors on the company’s share register at market close today are expected to receive this payment on October 26.
Alternatively, shareholders have the option of foregoing this cash payment in favor of participating in the company’s Dividend Reinvestment Plan (DRP). Those wishing to participate must choose to do so by September 27.
The market doesn’t seem happy with Latitude’s first-half 2022 results, with shares down 9% last month.
Volumes were $3.7 billion, up 2% from the prior corresponding period (pcp) in 1H21, led by the personal and auto lending divisions.
Risk-adjusted income fell 70 basis points against the pcp to 9.46%, weighed down by lower commodity prices and higher funding costs.
Since Latitude derives most of its revenue from interest on its products, other challenges during the semester included excessive consumer savings and high repayment rates.
Overall, the company’s net profit after tax (NPAT) fell 11% on pcp to $93 million. On a statutory basis, which includes non-cash items such as amortization and impairment, NPAT fell 66% to $31 million.
Despite the earnings cut, Latitude kept its interim dividend at 7.85 cents. This corresponds to the last two (and only) dividend payments from the company since its listing in mid-2021.
This means that Latitude shares are currently generating a significant dividend yield of 11.5%. Including franking credits, this yield rises to 16.4%.
However, broker Macquarie thinks Latitude could cut its dividends going forward, forecasting a dividend for FY23 of 8 cents per share. Based on current prices, this equates to a forecast forward dividend yield of 5.8%.
BSP Financial Group Ltd. (ASX: BFL)
BSP Financial, the South Pacific’s leading bank, will also be ex-dividend on Friday.
Like Latitude, BSP recently released its first-half 2022 results. The group cut its unencumbered interim dividend by 13% to 34 Papua New Guinean Kina (K).
ASX investors will receive this dividend in Australian dollars on October 14.
The exchange rate will be finalized next week. But based on current spot prices, that dividend could land at around 14 Australian cents.
Economic conditions in BSP’s markets improved in HY22, leading to a 13% increase in net operating income to K1,144m. Specifically, this was driven by increased lending activity in Papua New -Guinea and Fiji, and by increased transaction volumes now that the borders have reopened.
Ultimately, BSP saw a 30% growth in underlying NPAT to K586 million. However, the company was hit with an additional K190 million corporate tax as part of the new legislation that came into effect earlier this year.
BSP filed a petition with the Supreme Court to declare the additional corporate tax unconstitutional and invalid.
Coming back to dividends, we will have to wait for the confirmed exchange rate next week. But shares of BSP Financial could trade on a 12-month dividend yield of around 13% at current levels.
That said, between fluctuating exchange rates, offshore operations and a different regulatory environment, BSP stocks might be more complicated than your ordinary ASX investment.