At a glance

  • Most of that came from a large FY25 final Dividend of 16.5 NZc, paid after Tower's record Underlying Profit of NZ$107.2m.
  • The FY26 interim was cut from 8c to 5c (NZ cents), and FY26 profit guidance of NZ$55--65m sits well below the FY25 record.
  • Dividends carry 0% Australian franking. Tower pays NZ Imputation Credits only.

Tower (ASX:TWR) is a New Zealand general insurer, selling home, contents and motor cover to households. Its primary listing is on the NZX, and it also trades on the ASX, which is how Australian investors come across it in local Yield screens.

Because of that NZ-primary listing, Tower is not in the S&P/ASX 300, so it sits outside the benchmarks many Australian funds track, even though anyone can buy the shares on the ASX.

General insurance is a Business where profits can swing sharply from year to year. Claims costs depend heavily on weather events, Reinsurance pricing and competition, so a year with benign claims can produce outsized Earnings that are hard to repeat.

Which dividends make up the 11.40% yield?

The trailing yield counts dividends with ex-dates in the 12 months to 24 September 2026, divided by the scan price. Tower declares dividends in NZ cents, so the Australian-dollar amounts depend on the Exchange Rate the company sets for ASX holders. The window captures both of these payments:

FY25 final dividend: 16.5 NZc, ex-dividend 14 January 2026, paid 29 January 2026. At the company-set rate, that was A$0.1402.

FY26 interim dividend: 5.0 NZc, ex-dividend 10 June 2026, paid 25 June 2026, worth A$0.0412.

There were no special dividends, but the FY25 final deserves a closer look.

Why may the yield not last?

Look at where the money came from. The 16.5 NZc final was declared on the back of FY25's record underlying profit of NZ$107.2m, a result described as "exceptional". That word matters. It suggests FY25 should not be seen as a new baseline.

The numbers since then back that up. Underlying profit for H1 FY26 was NZ$36.8m, and Tower's FY26 guidance is NZ$55--65m. Even the top of that range is well short of the FY25 record.

The dividend has already started to follow earnings lower. The FY26 interim was cut from 8c to 5c (NZ cents). If the final dividend for FY26 is also sized to more normal profits rather than a record year, the next 12 months of payments could look very different from the last.

Here is the key point for yield hunters: the trailing yield is a rear-view mirror. It includes the 16.5 NZc final, which was funded by an exceptional year. As that payment rolls out of the 12-month window, the trailing yield will be recalculated on whatever Tower pays next. Unless the final dividend for FY26 is similarly large, the headline figure is likely to fall.

Why is the yield high even though the shares are up?

Instead, the yield is high because the dividends paid over the past 12 months were unusually large relative to the share price, driven by that record FY25 profit. That is a better problem than a falling price, but still a reason for caution: a yield inflated by a standout year tends to normalise when the standout year passes.

What could change for Tower shareholders?

Smaller dividends: the interim has already been cut from 8c to 5c (NZ cents), and guidance of NZ$55--65m points to a lower earnings base than FY25's NZ$107.2m.

Weather and claims: as a home, contents and motor insurer, Tower's profit can be hit hard by severe weather events, which could affect future payouts.

Currency: dividends are declared in NZ cents, so the A$ value Australian holders receive moves with the exchange rate.

Tax: the 0% Australian franking means no franking credits. NZ imputation credits generally cannot be used by Australian residents, so check how NZ-sourced dividends are taxed in your situation.

Index position: outside the S&P/ASX 300, Tower does not attract index-fund Demand from Australian benchmark trackers.