The entire banking sector offers extremely lucrative dividend yields. It’s easy to see why bank stocks are a favorite amongst yield investors. With the “big four” looking to increase dividends further, things could get even better. This article will report in detail, the Westpac Dividend.
Over the past decade Westpac Banking Corp WBC, has delivered below-market returns for investors, averaging just 3.16% per year. However, when we include dividends investors have actually enjoyed 15.29% per year.
Westpac has far outperformed the average market return of 11.9% in the past decade.
WBC Dividend Summary
|DPS (Trailing 12-Month)||$0.89|
|Gross DPS (Trailing 12-Month)||$1.2714|
Westpac Dividend Dates 2021
|Results Reporting||3 May 2021 (Mon)||1 Nov 2021 (Mon)|
|Declaration date||3 May 2021 (Mon)||1 Nov 2021 (Mon)|
|Ex-div date||13 May 2021 (Thu)||10 Nov 2021 (Wed)|
|Record Date||14 May 2021 (Fri)||11 Nov 2021 (Thu)|
|Pay date||25 Jun 2021 (Fri)||17 Dec 2021 (Fri)|
WBC Dividend History Graph
The Banking sector has been one of the favorites for investors over the years due to its decent returns and solid dividend history. It’s no surprise why the sector makes up around 30% of the entire market index. Over the past decade, big banking stocks have managed to maintain a steady flow of income for investors, with an exception of the COVID dip.
Westpac typically announces a dividend with the release of its half-year results in May and full-year results in November as seen in their financial calendar. WBC Dividends are typically paid twice a year, in June (interim dividend) and December (final dividend).
WBC has paid biannual dividends every year since 1983. Except in 2020 during the COVID-19 recessionary period. In 2020 they only announced a final dividend. All dividends since 2000 have been fully franked. They also offer a Dividend Reinvestment Plan (DRP).
WBC Dividend Yield Comparison
WBC’s current gross dividend yield is 5.10%. This is above the other big banks (CBA and, NAB) but below ANZ’s inflated yield of 6.63%.
The current WBC yield of 5.10% far exceeds the Average Term Deposit rate of 0.4%
Net WBC Dividend Yields Over Time
We can see WBC’s net dividend yield has averaged a rate of around 6%. From this, we can WBC’s current net yield of 3.51% is well below its historic average.
We can see the yield spike in 2020 due to a significant share price reduction. This yield tapered off as the share price increased, but earnings were still impacted. We are expecting earnings to return in 2021.
WBC Dividend Payout Ratio and Policy
A companies dividend payout ratio is the ratio of the total dividend sum paid out relative to the net income of the company. It is the percentage of earnings paid to shareholders in dividends.
Based on current averages WBC’s payout ratio is 71%, which we expect to increase in the coming years to a ratio of 80%.
Based on FY20 results WBC paid out 31 cents per share to investors. This comprised a final dividend payment of $0.31 which was fully franked. No interim dividend was paid.
Amplified by COVID-19, our share price declined over the year and dividends were significantly lowerWBC FY20 Report
We note in this report WBC announced a payout ratio of 49%, in line with AHPRAs guidelines. These guidelines are based upon maintaining liquidity in the current recessionary period.
“Banks should seriously consider deferring decisions on the appropriate level of dividends until the outlook is clearer”
APRA has indicated that for the remainder of the calendar year boards should:
- seek to retain at least half of their earnings when making decisions on capital distributions (and utilise dividend reinvestment plans and other initiatives to offset the diminution in capital from capital distributions where possible)
The amount that is not paid to shareholders is retained by the company to pay off debt or to reinvest in core operations. It is sometimes simply referred to as the ‘payout ratio.’
WBC Share Price
WBC Dividend Policy
WBC is determined to maintain their interim and final dividend going forward, in their FY20 report they stated:
“It is important we work quickly towards a consistent dividend each half by improving the performance of our portfolio of businesses and maintaining our capital strength.”
With the commencement of the 2021 calendar year, AHPRA’s 50% payout guideline is no longer current, as such, we will expect WBC to return to a more normalized payout ratio.
Over the past five years WBC’s payout ratio has been:
Westpac has no officially documented dividend policy.
When will my Westpac Dividends be Paid?
The Bank typically announces a dividend with the release of its half-year results in March and full-year results in November. Dividends are typically paid twice a year, in June (interim dividend) and December(final dividend). Payment dates are listed on the financial calendar.
WBC Dividend Reinvestment Plan (DRIP)
A DRIP or dividend reinvestment plan allows investors to automatically reinvest their dividends for additional shares in the company. Using this method, the investor will still receive the franking credit and will still be taxed on the cash value of their dividend.
- In Computershare it’s as simple as going ‘my profile’- ‘Reinvestment plans’ and selecting the company and electing to participate in full or partially. That is either the entire amount or a partial amount of your dividend is reinvested.
- On Link you simply click view details of the company of interest and update it in the ‘payments and tax’ section.
For more information check out our ASX DRIP VS NON-DRIP Guide
The Return of Dividends
Following the loss of earnings, we saw companies cut dividends across the board, leading to a massive reduction in the average dividend yield across the market. Now averaging below 4%. We saw the 4 big banks, which are known as massive dividend stocks, cut their yield by around 50% in 2020.
We saw the big four banks, cut dividends by around 50% in 2020
Following the return of earnings, we are expecting to see dividends returning to very attractive yields. Though we can’t expect past payout ratios, as many companies will elect to hold a large amount of cash on hand to strengthen their balance sheet against future uncertainties.
In 2021 we are expecting to see the big banks return more than $30 Billion to shareholders.
Across the market, we are expecting to see payout ratios increase by more than 10%. Which will have a big impact on the average yield rate. We are expecting to see the big banks return more than $30 Billion to shareholders.
WBC Dividend History
|Payment date||Rate (cents)||Franking level||DRP*|
|25/06/2021||58||Fully @ 30%||$25.98|
|18/12/2020||31||Fully @ 30%||$19.83|
|20/12/2019||80||Fully @ 30%||$25.17|
|24/06/2019||94||Fully @ 30%||$27.36|
|20/12/2018||94||Fully @ 30%||$25.82|
|04/07/2018||94||Fully @ 30%||$28.11|
|22/12/2017||94||Fully @ 30%||$31.62|
|04/07/2017||94||Fully @ 30%||$29.79|
|21/12/2016||94||Fully @ 30%||$31.32|
|04/07/2016||94||Fully @ 30%||$30.43|
|21/12/2015||94||Fully @ 30%||$31.83|
|02/07/2015||93||Fully @ 30%||$31.88|
|19/12/2014||92||Fully @ 30%||$32.68|
|02/07/2014||90||Fully @ 30%||$34.39|
|19/12/2013 – special dividend||10||Fully @ 30%||$32.50|
|19/12/2013||88||Fully @ 30%||$32.50|
|02/07/2013 – special dividend||10||Fully @ 30%||$28.94|
|02/07/2013||86||Fully @ 30%||$28.94|
|20/12/2012||84||Fully @ 30%||$24.86|
|02/07/2012||82||Fully @ 30%||$20.38|
|19/12/2011||80||Fully @ 30%||$20.32|
|04/07/2011||76||Fully @ 30%||$21.78|
|20/12/2010||74||Fully @ 30%||$21.57|
|02/07/2010||65||Fully @ 30%||$22.64|
|21/12/2009||60||Fully @ 30%||$23.61|
|02/07/2009||56||Fully @ 30%||$18.46|
|17/12/2008||72||Fully @ 30%||$16.13|
|02/07/2008||70||Fully @ 30%||$22.42|
|18/12/2007||68||Fully @ 30%||$27.53|
|02/07/2007||63||Fully @ 30%||$26.15|
|13/12/2006||60||Fully @ 30%||$24.05|
|03/07/2006||56||Fully @ 30%||$22.38|
|14/12/2005||51||Fully @ 30%||$22.22|
|01/07/2005||49||Fully @ 30%||$19.37|
|15/12/2004||44||Fully @ 30%||$18.37|
|02/07/2004||42||Fully @ 30%||$16.97|
|19/12/2003||40||Fully @ 30%||$15.66|
|04/07/2003||38||Fully @ 30%||$16.27|
|20/12/2002||36||Fully @ 30%||$13.95|
|05/07/2002||34||Fully @ 30%||$16.52|
|21/12/2001||32||Fully @ 30%||$15.37|
|06/07/2001||30||Fully @ 30%||$13.94|
|02/01/2001||28||Fully @ 34%||$13.92|
|07/07/2000||26||Fully @ 34%||$12.16|
|02/07/1999||23||Fully @ 36%||$10.28|
|04/01/1999||22||Fully @ 36%||$10.28|
|03/07/1998||21||Fully @ 36%||$9.67|
|05/01/1998||20||Fully @ 36%||n/a|
|04/07/1997||19||Fully @ 36%||n/a|
|28/01/1997||17||Fully @ 36%||n/a|
|05/07/1996||16||Fully @ 36%||n/a|
|31/01/1996||15||Fully @ 36%||n/a|
|08/07/1993||6||Fully @ 39%||$3.43|
|22/01/1993||6||Fully @ 39%||$2.96|
|09/07/1992||12||Fully @ 39%||$3.05|
|30/01/1992||12.5||Fully @ 39%||$4.03|
|05/07/1991||15||Fully @ 39%||$4.16|
|24/01/1991||27.5||Fully @ 39%||$3.08|
|06/07/1990||25||Fully @ 39%||$4.28|
|25/01/1990||27.5||Fully @ 39%||$5.05|
|07/07/1989#||18||Fully @ 39%||$4.50|
|26/06/1989#||7||Fully @ 49%||$4.50|
|27/01/1989***||28||Fully @ 49%||$4.89|
|01/07/1988||15||Fully @ 49%||$6.18|
|29/01/1988||14.5||Fully @ 49%||$4.38|
|03/07/1987||14||Fully @ 49%||$4.71|
|30/01/1987||14||Fully @ 49%||$4.59|
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