Do Woodside shares really have a 6.5% dividend yield right now?

If you look at the Woodside Energy Group Ltd (ASX: WDS) share price today, undoubtedly one of the first things that will catch your eye is this ASX 200 energy stock‘s monstrous dividend yield.

At yesterday’s close, Woodside shares ended up at $25.42 each. At this pricing, the oil and gas producer was trading with a trailing yield of 6.56%.

Now, that is objectively a rather hefty dividend yield in itself. But in the current climate? It’s downright mesmerising.

The stellar run that the S&P/ASX 200 Index (ASX: XJO) has been on over the past two years has been wonderful for investors. However, it has also pushed the dividend yields variable on many popular ASX dividend shares to historic lows. Prior to 2024, investors were probably used to seeing the major ASX banks, for example, trading on a fully franked yield of between 5-6%.

Today, Commonwealth Bank of Australia (ASX: CBA)’s yield is at just 3.2%, while the other majors are all between 4-5%.

It’s a similar story with Telstra Group Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES) and Coles Group Ltd (ASX: COL).

Yet Woodside is right at the front of the ASX 200 pack with that 6.56% yield.

So is this dividend yield ‘for real’, or is it too good to be true?

Should income investors bank on Woodside shares’ massive dividend 6.56% yield?

Well, yes, Woodside’s trailing yield of 6.56% is indeed legitimate. It comes from the two dividends that Woodside shares have paid out over 2025.

The first was the final dividend from April, worth 84.86 cents per share. The second, the interim dividend from September, worth 81.82 cents per share. Both dividends came fully franked.

That annual total of $1.60 per share gives Woodside that trailing yield of 6.56% that we see today.

However, buying Woodside shares right now doesn’t guarantee that investors will actually enjoy a 6.56% yield on their investment going forward. Trailing dividend yields only ever tell us about the past, not the future.

The future payouts from a stock like Woodside are particularly hard to anticipate, given how dependent they are on the price of energy. As an oil and gas stock, Woodside’s profit margins are highly vulnerable to movements in the global oil price.

In Woodside’s August half-year report, the company revealed that its average realised price per barrel of oil (barrel of oil equivalent) was US$61.80. If this realised price drops over the present financial year, it will put pressure on the company’s 2026 payouts. Particularly given that Woodside is already investing heavily in new North American operations right now.

So the ability for this company to continue to fund its dividends at current levels next year mostly comes down to what oil might do. And predicting that is a difficult task indeed.

Investors should keep this in mind when they consider buying this ASX 200 energy stock for income today.

The post Do Woodside shares really have a 6.5% dividend yield right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.