Rolls-Royce dividend
Rolls-Royce's forecast dividend rises from 0.13 GBP per share to 0.20, with 0.17 between; dividends were absent from 2021 through 2023. Cash generation is improving: real free cash flow per share rose to 35.46p, but future maintenance work and contract estimates remain the key coverage test.
How much does Rolls-Royce pay per share?
Dividends rise with earnings but remain exposed to the cycle. The base case uses 0.13 GBP per share in the first window, then 0.17 and 0.20. The bear case gives 0.06, 0.08 and 0.10; the bull case gives 0.15, 0.21 and 0.26. The 30–40% payout framework and the 6.0p interim dividend support growth, but dividends were absent from 2021 through 2023.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Normal operating profit | 5,170 (3,970 / 5,540) | 5,790 (4,340 / 6,490) | 6,150 (4,730 / 7,360) |
| Dividends per share | 0.13 (0.06 / 0.15) | 0.17 (0.08 / 0.21) | 0.20 (0.10 / 0.26) |
| Net debt | -5,217 (-4,187 / -5,297) | -7,497 (-5,157 / -7,847) | -11,697 (-8,857 / -13,087) |
Does Rolls-Royce's cash cover its dividend?
Rolls-Royce reports free cash flow of £3,270 million. Its definition includes currency treatment, investment movements and exclusions for selected exceptional cash costs. Both measures show a major recovery, but the stricter shareholder calculation is the better guide to what the business generated after its necessary claims. Real free cash flow per share rose to 35.46p from 26.29p.
Shareholder returns resumed after cash generation recovered. Rolls-Royce announced £7 billion–£9 billion of buybacks across 2026–2028, including £2.5 billion planned for 2026; by July, £1.4 billion had been completed. A buyback purchases shares and reduces the share count, while a dividend pays owners directly. Both can be sensible uses of surplus cash, but only if future service obligations remain affordable.
| Year to Dec 2025 | Year to Dec 2024 | Year to Dec 2023 | Year to Dec 2022 | Year to Dec 2021 | |
|---|---|---|---|---|---|
| Real free cash flow (after stock pay) (calculated) | 2,996 | 2,219 | 1,151 | 361 | -1,489 |
| Dividends paid | 885 | 0 | 0 | 0 | 0 |
| Shares bought back | 1,008 | 0 | 0 | 0 | 0 |
| Returned to shareholders, share of real free cash flow (calculated) | 63.2% | 0.0% | 0.0% | 0.0% | not meaningful |
What could change Rolls-Royce's dividend?
The view would move toward the bear case if, through 2027–28, costly removals weaken Civil Aerospace margins, supplier qualification restricts repairs, or inventory absorbs cash. The multiple would then compress by October 2029.
What is Rolls-Royce's dividend yield against its price?
The weighted price is 1414.14 GBp in October 2027, including dividends, for a 4% return from today. It rises to 1558.78 GBp in October 2028, a 16% return. By October 2029, it reaches 1659.86 GBp, or 24%. The three-year range runs from 913.78 GBp in the bear case to 2751.30 GBp in the bull case, against today’s 1372.20 GBp.
| Today (Oct 9, 2026) | |
|---|---|
| Share price | 1372.20 |
| Market value (calculated) | 113,812.81 |
| Dividend yield (calculated) | 0.7% |