Here’s the Wesfarmers dividend forecast through to 2025

If you’re an income investor, then the Wesfarmers Ltd (ASX: WES) dividend might be of interest.

Historically, the conglomerate shares a decent portion of its profits with shareholders each year, providing them with an above-average dividend yield.

Will this trend continue in the future? Let’s take a look at what one broker is expecting from the Wesfarmers dividend in the coming years.

Wesfarmers dividend forecast

First things first, in FY 2022, Wesfarmers paid shareholders a fully franked $1.80 per share dividend. So, with the Wesfarmers share price currently fetching $46.37, this equates to a 3.9% dividend yield.

Unfortunately, according to a recent note out of Goldman Sachs, its analysts are expecting the Wesfarmers dividend to go backwards for a couple of years.

In FY 2023, the broker is forecasting a $1.70 per share fully franked dividend. This equates to a 3.65% dividend yield for income investors. This reduction is expected to be driven by a combination of weaker earnings in FY 2023 due to margin pressures offsetting solid revenue growth and a lower payout ratio of 85%.

For similar reasons, the broker is then forecasting a reduction to $1.63 per share in FY 2024. This will mean a fully franked 3.5% dividend yield for that year.

Finally, in FY 2025, Goldman expects a return to both profit and dividend growth. Its analysts are forecasting a fully franked $1.80 per share dividend for investors that year. Based on the latest Wesfarmers share price, this equates to a fully franked 3.9% dividend yield.

In summary, that will be fully franked dividends per share of $1.70 in FY 2023, $1.63 in FY 2024, and then $1.80 in FY 2025. Which equates to yields of 3.65%, 3.5%, and 3.9%, respectively.

The post Here’s the Wesfarmers dividend forecast through to 2025 appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro 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 positions in and has recommended Wesfarmers 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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