Own Westpac shares? This broker expects the bank’s dividends to surge 10% by FY23  

Owners of Westpac Banking Corp (ASX: WBC) shares might be in for a good run, with one top broker predicting the bank will pay out 10% more in dividends in financial year 2023 than it did in financial year 2021.

It’s also tipping the bank will up its full-year payouts by 5.9% in financial year 2022.

Right now, Westpac shares are swapping hands for $21.93, 0.16% lower than they were at Friday’s close.

For context, the S&P/ASX 200 Index (ASX: XJO) is also down 0.06% today while the S&P/ASX 200 Financials Index (ASX: XFJ) has slumped 0.22%.

So, what could the future hold for the big four banking giant’s dividends? Let’s take a look at what Morgan Stanley thinks.

Westpac dividends and share price to lift: broker

As one of the ASX 200’s biggest bank shares, Westpac is known to be a relatively strong dividend payer. Indeed, it’s been paying investors a portion of its profits since the early 1980s.

And its full-year payouts could be gearing up to leap over the coming two financial years.

While most ASX companies wrap up their financial years at the end of June, Westpac’s doesn’t end until 30 September.

That means the last full-year payout we have to reference is that of financial year 2021, which saw the bank offering $1.18 of dividends per share.

With that in mind, Morgan Stanley thinks the market could be in for a surprise when Westpac releases its full-year earnings in November.

The broker expects Westpac to offer $1.25 per share in dividends this financial year, as my Fool colleague James reports.

Its full-year dividends are tipped to rise once more in financial year 2023 to reach $1.30. That’s a whopping 10.1% higher than that of financial year 2021.

Though, that’s still less than the $1.74 offered to shareholders in financial year 2019.

Morgan Stanley has also slapped Westpac’s shares with a $22.30 price target and an outperform rating.

The post Own Westpac shares? This broker expects the bank’s dividends to surge 10% by FY23   appeared first on The Motley Fool Australia.

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More reading

• 2 ASX dividend shares that experts rate as buys
• Can Westpac shares deliver a competitive dividend yield and 20% upside in FY23?
• Broker says Westpac share price ‘offers the most upside of the banks’
• How are ASX 200 bank shares responding to the RBA rate increase?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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