When it comes to looking for dividend shares, few will think of looking at the lithium miners.
However, this could soon change given the high levels of free cash flow that miners are generating thanks to sky high prices of the white metal.
And while it might be too soon to think of dividends this year, Allkem Ltd (ASX: AKE) shares have been tipped to provide investors with some big yields in the future.
What is expected from the Allkem dividend?
According to a recent note out of Credit Suisse, its analysts are not expecting dividends from Allkem in FY 2022. But in FY 2023, it is predicting a maiden dividend of 69 U.S. cents per share.
Based on current exchange rates, this will mean a $1.02 per share dividend for investors.
The good news is that Credit Suisse expects the company to build on this in FY 2024. It is forecasting a dividend of 71 US cents per share. This represents a $1.05 per share dividend in the local currency.
So, with the Allkem share price currently trading at $9.89, this will mean very attractive yields of 10.3% in FY 2023 and then 10.6%, respectively.
Are Allkem shares in the buy zone?
Despite predicting these big dividends, Credit Suisse only has a neutral rating on Allkemâs shares at this point.
Though, with a price target of $11.00, it still sees potential upside of 11% for the Allkem share price over the next 12 months. Thatâs not bad for a neutral rating!
All in all, this could make Allkem worth considering if youâre looking for exposure to lithium and some big dividends in the coming years.
The post Is Allkem a top ASX dividend share hiding in plain sight? appeared first on The Motley Fool Australia.
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More reading
- What’s the outlook for Allkem shares in FY23?
- Why Allkem, Kogan, Metcash, and Sezzle shares are sinking
- Why are these ASX 200 lithium shares tumbling today?
- Is this a good time to go digging for ASX 200 mining shares for FY23?
- ASX battery metals shares trying to power up after a horror June
Motley Fool contributor James Mickleboro has positions in Allkem Limited. 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.
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