Tesco dividend
Tesco pays a dividend per share that has increased each year in the supplied record, with the latest completed-year dividend at £0.145. Tesco generates substantial cash, but coverage depends on what remains after normal working capital, necessary investment and recurring obligations.
How much does Tesco pay per share over the years shown?
Dividends rise gradually in the base case, from £0.153 to £0.169 per share. The bear case holds at £0.145, matching the latest completed-year dividend. The bull case rises from £0.158 to £0.187. Tesco has increased its dividend each year in the supplied record and targets a progressive policy near 50% of adjusted EPS, while the newly declared interim is 5.05p.
| Year to Feb 2026 | Year to Feb 2025 | Year to Feb 2024 | Year to Feb 2023 | Year to Feb 2022 | |
|---|---|---|---|---|---|
| Revenue | 73,712 | 69,916 | 68,187 | 65,322 | |
| Net income | 1,787 | 1,600 | 1,760 | 659 | |
| EPS, diluted | 27.10 | 23.10 | 24.50 | 8.80 | |
| Dividend per share | 14.50 | 13.70 | 12.10 | 10.90 | 10.90 |
Does Tesco's cash cover its dividend?
The pattern matters more than any single year. Tesco repaid debt during the first four years, then raised a small amount of net debt in the latest year. Acquisitions absorbed little across the period, while exceptional money from the banking disposal supported an additional buyback of about £700 million.
That explains how distributions could exceed one year’s free cash flow without proving that Tesco financed the whole gap with new borrowing. The company could also use cash accumulated earlier or proceeds from selling a business. Debt repayment improved resilience, but recurring dividends and buybacks still need recurring cash after necessary reinvestment.
| Year to Feb 2026 | Year to Feb 2025 | Year to Feb 2024 | Year to Feb 2023 | Year to Feb 2022 | |
|---|---|---|---|---|---|
| Real free cash flow (after stock pay) (calculated) | 1,288 | 1,240 | 1,618 | 1,865 | 1,804 |
| Dividends paid | 937 | 864 | 778 | 859 | 731 |
| Shares bought back | 1,443 | 1,016 | 752 | 781 | 278 |
| Acquisitions | 9 | 46 | 17 | 66 | 0 |
| Debt raised minus debt repaid (calculated) | 116 | -302 | -93 | -608 | -360 |
| Returned to shareholders, share of real free cash flow (calculated) | 184.8% | 151.6% | 94.6% | 87.9% | 55.9% |
What could change Tesco's dividend?
Management guides to group adjusted operating profit of £3,150m–£3,300m and free cash flow of £1,500m–£2,000m for the year to February 2027. Capital expenditure of approximately £1,700m and a £950m buyback will compete with dividends and other uses of cash. Tesco also targets £500m of Save to Invest savings and a £500m Whoosh sales milestone; neither target is additional profit.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Earnings | 2,192 (1,850 / 2,300) | 2,268 (1,802 / 2,472) | 2,336 (1,799 / 2,653) |
| Shares (millions) | 6,108 (6,140 / 6,093) | 5,946 (6,039 / 5,910) | 5,790 (5,935 / 5,743) |
| Dividends per share | 0.15 (0.14 / 0.16) | 0.16 (0.14 / 0.17) | 0.17 (0.14 / 0.19) |
| Price to earnings | 16.00 (13.00 / 18.00) | 15.50 (12.00 / 19.00) | 15.00 (11.00 / 20.00) |
What is Tesco's dividend yield against its price?
Cash measures complete the picture. A 6.1% free-cash-flow yield compares cash generation with the share price, while a 2.9% dividend yield measures the cash dividend. But first-half free cash flow of £1.57 billion benefited from about £250 million of payroll timing, which was expected to reverse. The investor therefore needs repeatable operating cash after investment, interest, tax and leases.