AEI Q4 Dividend

[Summerdeep]

Just announced that the dividend payable on 10 January will be 5.8p. If this is to be the payout for the following four quarters, as recent history suggests it will be, then this represents a measly 1.75% increase in 2025-26, well below the expected inflation rate and just disappointing full stop in my book.

On the other hand, punters buying at today's price are still getting a 7% yield, which many would consider well worth their while, if the share price holds up. Still not much comfort for those who bought around 2018 and have suffered a capital loss of up to 35% though (far greater when inflation is taken into account)!

[mike]

If this is to be the payout for the following four quarters, as recent history suggests it will be, then this represents a measly 1.75% increase in 2025-26, well below the expected inflation rate and just disappointing full stop in my book.

Worse than that I'm afraid

The Board is committed to maintaining and extending the Company's track record of dividend growth. We therefore expect that, in the absence of any adverse circumstances, in the coming financial year we will extend our track record to 25 consecutive years of dividend growth by paying a dividend of at least 23.0 pence per share. We believe that we are in a position to do this because the most recent analysis from the Portfolio Manager indicates that the portfolio will be able to cover this cost out of the current year earnings. We are also carrying revenue reserves of £10.3 million in the balance sheet which we could also utilise if needed. We expect that the first three interim dividends will be 5.7 pence per share, payable in March, June and September and the fourth interim will be at least 5.9 pence per share payable in January 2026.

https://www.investegate.co.uk/announcem ... rt/8577130

Two succesive years at at 0.4% increase, and a 5-year CAGR increase of 2.2% (compared to 5-year CAGRs of CPI 4.4% and RPI 6.0% to end Sept 2024).

But the 2.2% CAGR is not too shabby compared to its UK Income IT peers, and the revenue reserve is fairly healthy.

[Summerdeep]

Hmmm....actually a 1.31% dividend increase for 2025-26 if we assume a total payout of 23.2p (4 x 5.8) as opposed to this last 12 months' 22.9p (3 x 5.7 plus 1 x 5.8). I was perhaps being too optimistic!

[kernelthread]

Over the period 2012 to 2024 it's averaged a 5% dividend growth rate. The problem is most of that happened between 2012 and 2019 (average 7% per year growth). Since then the dividend has stagnated a bit, the SP has plunged and inflation was very high for two years, so overall not good.