How many Origin Energy shares do I need for $1,000 per month of passive income in FY27?

Origin Energy Ltd (ASX: ORG) shares among my top picks for passive income.

The company is a major ASX energy company that supplies electricity, natural gas, and solar power to homes and businesses across the country.

The company operates a huge electricity generation fleet powered by traditional fuels like natural gas and coal, including the Eraring Power Station in New South Wales.

It is also expanding its footprint into large-scale batteries, wind, and solar assets. 

Through joint ventures, Origin Energy has also diversified into natural gas supply and exports liquefied natural gas (LNG) globally.

And there’s more. Origin has also invested outside of the energy sector. The company also offers NBN broadband internet packages, electric vehicle (EV) charging integrations, and what it calls “virtual power plant orchestration”. This is where it uses smart software to sync thousands of home batteries, solar panels, and EVs so they act as one giant, decentralised power station.

Given both energy and connectivity are essential services, Origin Energy is widely considered as a classically defensive stock. 

This means its shares can usually be relatively resilient to sharemarket volatility, global uncertainty and inflation shifts. 

After all, Australians won’t stop powering their homes and businesses because the purse strings have tightened.

And there is another defensive quality too. Origin’s assets operate under long-term contracts, often with rising income. This means the company can lock in a stable cash flow and manage volatility as it arises.

And it passes these benefits directly onto its shareholders.

What’s the latest out of Origin Energy shares?

At the time of writing, Origin Energy shares are trading at $11.82 a piece. That’s a 9% increase during the first two weeks of October alone, and they’re now up 4% for the year-to-date.

What does Origin’s dividend look like?

Origin has historically paid its shareholders every six months, consisting of an interim dividend in March and a final dividend in October.

In FY26, the company paid its investors a total 60 cents per share dividend – 30 cents per share in March and another 30 cents per share in October – fully franked.

At the time of writing that translates to a dividend yield of around 5.2%.

What is the ASX energy company forecast to pay shareholders in FY27 and FY28?

According to CommSec forecasts, Origin Energy is expected to continue paying shareholders a 60-cent annual dividend in FY27 and FY28. Is it then expected to pay a slightly higher 62-cent dividend in FY29.

At the time of writing, that implies a forward yield of 5.2% for FY27 and FY28. For FY29 the forward yield is a little higher, at 5.24%.

So, how many Origin energy shares do I need to generate $1,000 of passive income every month?

Origin Energy doesn’t pay its dividends on a monthly basis so first we need to calculate what $1,000 per month in passive income is over the whole year ($12,000). 

In order to earn $12,000 per year in passive income from Origin Energy shares in FY27 and FY28, at 62 cents per unit, investors would need to own around 20,000 shares.

To earn the same amount from the projected 62-cent dividend in FY29, investors would need to own roughly 19,354 shares.

What would that cost?

At $11.82 per share, 20,000 shares would require an investment of around $236,400 for FY27 and FY28. This would give the equivalent passive income of around $1,000 per month.

To earn the same in FY28, investors would need to spend closer to $228,764.

These aren’t small sums but Origin’s stable dividend payment could make the investment worthwhile. And remember, you don’t need to invest the whole lot in one go. Let compound growth do some of the work.

The post How many Origin Energy shares do I need for $1,000 per month of passive income in FY27? appeared first on The Motley Fool Australia.

More reading

• Origin Energy vs Woodside Energy: Which ASX 200 share is more likely to beat the market?
• Here are the top 10 ASX 200 shares today
• Which does Macquarie prefer out of AGL and Origin?
• ASX 200 defensive sectors outperform amid volatile trading
• How much superannuation do I need to generate $100,000 per year in passive income?

Motley Fool contributor Samantha Menzies 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.