Could dividends be back on the cards for Flight Centre shares soon?

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.

It’s been years since those invested in S&P/ASX 200 Index (ASX: XJO) travel giant Flight Centre Travel Group Ltd (ASX: FLT) shares have received a dividend from the company.

That’s despite its ASX 200 peer Corporate Travel Management Ltd (ASX: CTD) offering investors a 5-cent per share final payout for financial year 2022.

But there’s a good reason Flight Centre isn’t offering payouts just yet. The travel agent hasn’t posted a half year’s profit since 2019 after the pandemic took its toll on the travel industry. Thus, it can’t hand out a portion of its profits in the form of dividends.

And the company’s stock has dived alongside its earnings. The Flight Centre share price is currently $15.01. That’s around 60% lower than it was at the end of 2019.

So, when might investors see a dividend from the ASX 200 travel share? Let’s take a look.

When are Flight Centre shares expected to pay a dividend?

Flight Centre shares might not be on the cusp of paying a long-awaited dividend, but patient investors will likely be rewarded in the coming years.

The company’s leisure and corporate businesses both returned to profitability in the second half of financial year 2022. But that wasn’t enough to stop Flight Centre from posting a full-year loss of $272.6 million.

And while its recovery is said to be outpacing that of the industry, the company isn’t expecting to turn things around in financial year 2023.

Though, it does believe it will be tracking close to its monthly pre-COVID total transaction levels by the end of this fiscal year.

Following the release of the company’s expectations, Goldman Sachs voiced its expectations for Flight Centre’s shares to return to dividends.

The broker predicts the company could offer investors a payout in financial year 2024, as my Fool colleague James reports.

If such tips come true, the stock could end up going five years without paying a dividend following the onset of the pandemic.

The post Could dividends be back on the cards for Flight Centre shares soon? appeared first on The Motley Fool Australia.

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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 Corporate Travel Management Limited and Flight Centre Travel Group Limited. 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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