Are most stocks dividends franked?

helpme · 18 March 2016

I would like to check with the experienced folks here. Franked dividends stocks mean the investors get paid more dividends due to less tax? Where can one check whether the particularly stock is franked? Are almost all stocks franked? If yes, it is not necessary to have the hassle of whether the stock is franked or not.

McLovin · 18 March 2016

helpme said:
I would like to check with the experienced folks here. Franked dividends stocks mean the investors get paid more dividends due to less tax? Where can one check whether the particularly stock is franked? Are almost all stocks franked? If yes, it is not necessary to have the hassle of whether the stock is franked or not.

Any Australian company (from BHP right down to the local corner store) receives franking credits on its Australian sourced profits. So yes, most Australian companies pay franked dividends. If a company isn't paying franking credits then you should understand why it's not.

helpme · 18 March 2016

McLovin said:
Any Australian company (from BHP right down to the local corner store) receives franking credits on its Australian sourced profits. So yes, most Australian companies pay franked dividends. If a company isn't paying franking credits then you should

Thanks. I guess it is unnecessary to check whether the listed company pays franked dividends since almost all of them do. However, what about foreign companies listed on ASX? They are not Australian companies. So, they do not pay franked dividends?

McLovin · 18 March 2016

helpme said:
Thanks. I guess it is unnecessary to check whether the listed company pays franked dividends since almost all of them do. However, what about foreign companies listed on ASX? They are not Australian companies. So, they do not pay franked dividends?

It depends on the source of the income. Someone like CSL doesn't pay franked dividends because most of its earnings are foreign. It takes a couple of seconds to check so it's worthwhile.

helpme · 18 March 2016

McLovin said:
It depends on the source of the income. Someone like CSL doesn't pay franked dividends because most of its earnings are foreign. It takes a couple of seconds to check so it's worthwhile.

Thanks. May I ask how much more does one need to pay if the dividends are unfranked? Where can one check the franked status?

McLovin · 18 March 2016

helpme said:
Thanks. May I ask how much more does one need to pay if the dividends are unfranked? Where can one check the franked status?

I'm a little confused by your first question.

The ASX lists dividend details including franking details.

http://www.asx.com.au/asx/markets/dividends.do

helpme · 18 March 2016

McLovin said:
I'm a little confused by your first question.

The ASX lists dividend details including franking details.

http://www.asx.com.au/asx/markets/dividends.do

Thanks for the dividends link! You have been most helpful.

What I mean is ... if a stock X is 100% franked compared stock Y is 0% franked and they pay the same amount of dividends, how much would the investor receive in each case? What is the difference?

Bill M · 18 March 2016

helpme said:
Thanks. I guess it is unnecessary to check whether the listed company pays franked dividends since almost all of them do. However, what about foreign companies listed on ASX? They are not Australian companies. So, they do not pay franked dividends?

Hello helpme, yes you need to check each stock to see if they pay franked dividends or not. Most REIT's do not, that's just an example. Some stocks pay "partly franked" dividends too.

The best way to check is to log into your online broker account. Go to quotes and type in CBA (example) then click display. Then click company research, then click dividends. There is a column showing what the franking percentage is.

I use this feature all the time. I receive a superannuation pension and it is very important for me to know how much franking I receive because it all comes back to me in the form of cash. (No tax is payable on earnings for super that is in pension mode.) Cheers, all the best.

McLovin · 18 March 2016

helpme said:
Thanks for the dividends link! You have been most helpful.

What I mean is ... if a stock X is 100% franked compared stock Y is 0% franked and they pay the same amount of dividends, how much would the investor receive in each case? What is the difference?

Assume both dividends are for 70c. On a pre-tax basis the full franked dividend is 100c the unfranked dividend is still 70c. Assume you're on 47% marginal tax rate. After tax ff dividend is 100*(1-0.47) = 53c; unfranked dividend is 70*(1-0.47) = 37c.

helpme · 18 March 2016

Thanks to all the helpful replies. God bless all of you.

pixel · 18 March 2016

helpme said:
Thanks to all the helpful replies. God bless all of you.

I have just updated two spreadsheets:
1. Dividend History of all current stocks listed on the ASX, complete with franking %
2. Most recent dividends paid or known to be due, sorted by ex-div date

View attachment Dividends.xls

I use these sheets to alert me of upcoming dividends, also showing the amount of franking credits I could expect at my next Tax Return. It is then easy to work out the total yield relative to the latest share price, which in this case is yesterday's Close.
Note: the yield relates to the period for which the dividend is paid, usually half a year.

Due to size restrictions, I can only attach one of them (#2) because the complete history exceeds 1MB.
Feel free to download it and extract the info you are after: Number of companies with 100% franking vs unfranked and anything in between.

PS for those unfamiliar with Franking:
100% franked means the dividend is paid from operating profits, for which the full Australian company tax - currently 30% - has been paid. That means, the shareholder's portion of the company profits is 3/7th higher because of every Dollar earned, 30c has already been paid to the ATO and the paid-out dividend represents therefore only 70c. Franking credits are, for Australian taxpayers receiving those 70c, deemed to be pre-paid tax. If your marginal tax rate is less than 30%, you will receive the overpaid amount as a credit in your tax return.

helpme · 18 March 2016

pixel said:
I have just updated two spreadsheets:
1. Dividend History of all current stocks listed on the ASX, complete with franking %
2. Most recent dividends paid or known to be due, sorted by ex-div date

View attachment 66092

I use these sheets to alert me of upcoming dividends, also showing the amount of franking credits I could expect at my next Tax Return. It is then easy to work out the total yield relative to the latest share price, which in this case is yesterday's Close.
Note: the yield relates to the period for which the dividend is paid, usually half a year.

Due to size restrictions, I can only attach one of them (#2) because the complete history exceeds 1MB.
Feel free to download it and extract the info you are after: Number of companies with 100% franking vs unfranked and anything in between.

God bless you too I will study your Excelsheet carefully.

jackstew320 · 16 March 2018

Not all companies offer dividend full franked. Some of like transurban, scentre group.

So_Cynical · 16 March 2018

jackstew320 said:
Not all companies offer dividend full franked. Some of like transurban, scentre group.

True, TLC derives most of its profit from off shore operations/assets so no franking credits are available for those profits, scentre group is/was a trust and trusts do not get franking credits due to the tax structure of trusts.

CSL, BLD, AMC, CCL, QBE are some of the other big stocks that have large off shore profits thus do not pay fully franked dividends.

Are most stocks dividends franked?

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