The Origin Energy Ltd (ASX: ORG) share price is starting this Tuesday off on a positive note. Origin shares at the time of writing, are up 0.67% to $4.50 a share. That's not quite as buoyant as the S&P/ASX 200 Index (ASX: XJO), which is up 0.36% today to a new all-time high as we speak. But it's still a good performance.
However, Origin's good graces don't hold up as well if we zoom out a little. This energy company remains down 6.8% year to date in 2021 so far, and an even more disappointing 21.5% over the past 12 months.
The pain doesn't end there either. Origin is also down 18.2% over the past five years. Additionally, at today's share price, an investor can pick up Origin shares for the same price as what it would have cost them back in early 2004.
This might be music to at least some investors' ears though. As any dividend investor would know, lower share prices mean higher starting dividend yields. And, as an energy utility company, Origin is already known as an ASX dividend heavyweight.
So on today's pricing, Origin shares offer a trailing dividend yield of 5%. This stems from Origin's last two dividend payments – a final dividend of 10 cents a share that was paid out in October last year. And an interim dividend of 12.5 cents per share that was paid out on 26 March this year. Both dividends were unfranked.
But that's all in the past now, so what of the future? Is the Origin share price a buy for this 5% dividend yield – objectively a very attractive yield, especially in this era of near-zero interest rates?
Are Origin shares a buy for the 5% dividend yield today?
Well, one broker who is answering in the affirmative today is investment bank Goldman Sachs. Goldman currently rates the Origin share price as a 'buy', with a 12-month share price target of $6.40 a share. That implies a potential upside of just over 42% on the current share price.
Goldman is bullish on Origin as it sees the rising oil price as a cushion for the current low price of wholesale electricity that is battering Origin's near-term prospects. Goldman sees FY2022 as a tough year for the company, but it also sees the headwinds it's facing as temporary beyond FY2022.
But what about Origin's dividend, the reason we're all here? Well, Goldman Sachs also sees plenty of upside in this department too. The broker reckons Origin's annual dividend will rise to 26.5 cents per share for FY2021, and keep rising until it hits 39.4 cents per share in FY2023.
That implies a potential forward FY2023 yield of 8.78% on the current Origin share price.
