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the Insurance Australia Group Ltd (ASX:IAG) Share price outperforms in May, but company still shows strong dividend yield.
Over the past 12 months, the company has again increased its dividends. However, his stock is still trading significantly lower than it was before the pandemic.
At the time of writing, IAG stock price is up 1.32% on the day at $4.62. This is about 2% more than at the end of April, but about 40% less than at the start of 2020.
For context, the S&P/ASX 200 Index (ASX:XJO) has slipped 5% so far in May and is up about 4% from the start of 2020.
So, with that in mind, let’s take a look at how the company’s dividends compare to its May share price.
Is IAG really trading with a 4% dividend yield?
Those who hold IAG stock for dividends will likely be pleased to know that the company’s dividend yield is 4.16% as of Thursday’s close.
Over the past 12 months, IAG has paid two dividends with a combined value of 19 cents.
The first was its final dividend of 13 cents from the 2021 financial year. The second was its interim dividend, worth 6 cents.
This represents a better annual payout than shareholders received in fiscal 2021.
That year, the company skipped its final dividend before offering an interim dividend of 7 cents.
However, investors received a final dividend of 20 cents and an interim dividend of 10 cents in fiscal year 2020.
That makes this fiscal year’s combined payouts a 171% improvement over fiscal 2021, but a 36% reduction from those in fiscal 2020.
It should also be noted that IAG’s last three dividends have not been franked. This meant some shareholders weren’t able to take advantage of the tax benefits that often come with ASX dividends.
IAG is expected to announce its next dividend – the final dividend for fiscal year 2022 – on August 12.
IAG Share Price Overview
IAG stock price is outperforming the broader market in 2022. It has gained 3.5% year-to-date while the ASX 200 has fallen 7%.
However, the insurer’s stock has depreciated 6% over the past 12 months. The ASX 200 gained 0.6% over this period.