Ferguson dividend
Ferguson's dividend rises from $3.65 to $4.42 per share in the base case, extending a five-year record of annual increases from $2.39 to $3.32. Cash coverage is uneven: first-half free cash flow was $482 million against $347 million of dividends.
How much does Ferguson pay per share?
The dividend rises from $3.65 to $4.42 per share in the base case. That extends a five-year record of annual increases from $2.39 to $3.32. The bear case freezes at $3.48 because first-half free cash flow was $482 million against $347 million of dividends. The bull case reaches $5.05 as stronger cash conversion permits faster increases.
| Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 | Jul 2021 | |
|---|---|---|---|---|---|
| Free cash flow per share | 8.05 | 7.38 | 11.03 | 3.92 | 4.88 |
| − Dividends paid, per share | 2.45 | 3.85 | 3.43 | 2.46 | 4.61 |
| = FCF not paid out, per share | 0.83 | 0.41 | 3.22 |
What this means. The company's own free cash flow per share is higher because it adds cash from selling assets and businesses, which our count leaves out.
Does Ferguson's cash cover its dividend?
That is what happened in the strongest payout years. Ferguson used balance-sheet capacity to support dividends and buybacks, including an exceptional distribution connected with the UK sale. A buyback pays shareholders to surrender shares; reducing the share count can raise earnings per share even if total profit barely changes.
Fiscal 2025 shows the difference. Operating cash flow was $1,908 million, and free cash flow after capital spending was $1,603 million. Ferguson’s own free-cash-flow figure also included asset-sale proceeds, while acquisitions remained a separate use of cash. Stock compensation is another economic cost that a stricter cash analysis may deduct.
| Jul 2025 | Jul 2024 | Jul 2023 | Jul 2022 | Jul 2021 | |
|---|---|---|---|---|---|
| Free cash flow | 1,603 | 1,501 | 2,286 | 859 | 1,096 |
| − Dividends paid | 489 | 784 | 711 | 538 | 1,036 |
| − Share buybacks | 948 | 634 | 908 | 1,637 | 400 |
| = Free cash flow not paid out | 166 | 83 | 667 | ||
| = Paid out more than the free cash flow | 1,316 | 340 |
What this means. The company's own net debt is slightly different from our calculation because it uses a different definition of debt and cash.
What could change Ferguson's dividend?
For the year to December 2026, management guides to mid-single-digit sales growth and a 9.5%–9.8% adjusted operating margin, excluding FloWorks. It expects $200 million of interest expense and $375–$425 million of capital spending. The guidance uses a 26% adjusted tax rate. Its medium-term ambition is more than $40 billion in revenue and more than $4 billion in adjusted operating profit. The target margin is above 10%.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Normal operating profit | 3,150 (2,850 / 3,400) | 3,300 (2,950 / 3,750) | 3,500 (3,100 / 4,100) |
| Dividends per share | 3.65 (3.48 / 3.82) | 4.02 (3.48 / 4.39) | 4.42 (3.48 / 5.05) |
| Net debt | 5,563 (6,226 / 5,247) | 4,895 (6,134 / 4,318) | 4,117 (5,710 / 3,089) |
What is Ferguson's dividend yield against its share price?
The returns are 16% and 29% at the first two dates. They reach 45% by the third. The October 2029 range runs from $210.37 in the bear case to $465.59 in the bull case, against today’s $231.61.