Unfranked Dividend Signals Caution Amid News Corp’s Steady Payout

Dividend Announcement Overview

News Corporation (ASX: NWS) has declared an ordinary dividend of USD 0.10 per Class B Voting Common Stock, marking its shareholder distribution for the half-year period ending December 31, 2024. The announcement, made on February 6, 2025, sets the ex-dividend date for March 11, 2025, with the record date following on March 12 and payment scheduled for April 9, 2025.

Dividend Details and Currency Arrangements

The dividend will be paid primarily in US dollars to holders of the Class B common stock. However, holders of CHESS Depositary Interests (CDIs) representing these shares on the ASX will receive payments in Australian dollars. The company has disclosed that the AUD equivalent and exchange rates will be estimated and released by March 28, 2025. Shareholders do not have the option to select an alternative currency for their dividend payments.

Tax and Franking Considerations

This dividend is fully unfranked, meaning it carries no franking credits. Consequently, a withholding tax rate of 30% applies, which is standard for distributions made by multinational entities to foreign investors. This tax treatment may influence the net yield for certain shareholders, particularly those in jurisdictions without favorable tax treaties with the United States or Australia.

Context and Market Implications

News Corporation’s decision to maintain a steady dividend payout signals confidence in its ongoing cash flow generation amid a dynamic media landscape. While the unfranked nature of the dividend may temper its attractiveness for some investors, the consistent distribution underscores the company’s commitment to returning value to shareholders. Analysts will be watching closely to see how this dividend aligns with News Corp’s broader financial strategy and operational performance in the coming quarters.

Looking Ahead

With the dividend payment scheduled for early April, investors will soon assess the impact on News Corporation’s share price and overall market sentiment. The forthcoming AUD equivalent announcement will also provide clarity for Australian investors on the precise value of their returns. This dividend announcement sets the stage for further scrutiny of News Corp’s financial health as it navigates evolving industry challenges.