A dividend increase by Royal Ahold Delhaize (AD)
Last week Ahold Delhaize announced an 8.57% increase in its yearly dividend. The dividend is raised from €0.70 to €0.76. This represents a payout ratio of approx. 44%. This dividend is up for approval by the General Meeting of Shareholders. The dividend pay date is April 23, 2020 to shareholders of record on April 13, 2019 (ex-dividend April 10, 2019).
Frans Muller, President and CEO of Ahold Delhaize:
“Ahold Delhaize ended the year on a high note, with strong group performance in the fourth quarter. We exceeded our full-year 2019 guidance outlook for underlying earnings per share and met our free cash flow guidance. We posted 17.1% growth in underlying earnings per share from continuing operations in the fourth quarter, resulting in an increase of 8.4% for the full year, above our full-year guidance of low-single-digit growth. Ahold Delhaize also generated €1.8 billion in free cash flow in 2019, achieving our guidance outlook, despite significantly stepping up capital investments in order to drive long-term growth in our business.”
As of 2019, Ahold Delhaize commits to semi-annual dividend payments. The interim dividend per share for 2020 will be announced on August 5, 2020, the date of the release of the second quarter results and will be equal to 40% of the year-to-date underlying income per share from continuing operations. AD has the ambition to maintain a sustainable growth of its full year dividend per share. In august 2019 Ahold Delhaize paid their first semi-annual dividend. For more information about this change in dividend policy, just read my post Royal Ahold Delhaize, changed its dividend policy. The dividend which will be paid in April 2020 is the final dividend for the whole of 2019.
The new dividend of €0.76 per share results in a dividend yield on current price of 4.53%.
My Vrijheid Fonds consist of 444 shares of Ahold Delhaize, so my annual dividends will increase by €20.58 ($ 22.64) after taxes. My projected annual total amount of dividend in 2020 from my shares of Ahold will be €288 after taxes.
Besides this dividend increase, Ahold Delhaize also announced a new €1 billion share buyback program is in place for 2020. This after completing the €1 billion share buyback in 2019.
Again, a very nice dividend increase for my Vrijheid Fonds in 2020.