Much to the disappointment of some shareholders, there will be no Sydney Airport Holdings Pty Ltd (ASX: SYD) dividend in FY 2020.
This is the first time in its listed history that the airport operator hasn't rewarded its shareholders with an annual paycheck.
But one leading broker believes the investors that stick with the company will be rewarded handsomely in the future.
Who is bullish on Sydney Airport shares?
According to a note out of Goldman Sachs, its analysts have retained their buy rating and $7.02 price target on its shares.
Based on the current Sydney Airport share price, this price target implies potential upside of just under 9% over the next 12 months excluding dividends.
This stretches to almost 11% if you include the ~13.3 cents per share dividend it expects the company to pay in FY 2021.
Looking further ahead, Goldman expects this dividend to more than double to ~29.2 cents per share in FY 2022 when trading conditions return to normal
What did Goldman say?
Goldman Sachs has been pleased with Sydney Airport's recovery from the pandemic and notes that its recent update is in line with its forecasts.
It explained: "SYD's November pax volumes align with our expectations of an improvement in domestic pax with the softening of state boarders in NSW. We expect to see a continued increase in December data with holiday travel and the reopening of the NSW and Victoria border on 23 November."
It also notes that Qantas Airways Limited (ASX: QAN) is planning to increase its flights into the airport, which should help its recovery.
"QAN has indicated that it has scheduled 15 flights/day (well below the 45 pre-Covid-19), but that there is significant pent-up demand for the route and that on the day of the reopening of ticket sales it sold over 100k SYD-MEL tickets," the broker said.
All in all, the broker feels it is worth sticking with the company, especially with its shares still trading materially lower than their pre-COVID highs.
