Before 2020, Transurban Group (ASX: TCL) was an ASX 200 share that had a reputation as one of the most resilient ASX dividend shares on the market. With its primary business of providing inflation-indexed toll roads, it had the perfect business model for providing a rising stream of dividend income to its yield-hungry investors. Or at least, that’s what many people thought. As it turned out, a global pandemic was the Transurban dividend’s kryptonite.
Until 2020, Transurban was one of the ASX companies that managed to deliver an annual dividend increase every year since 2009. Back in ’09, Transurban forked out a total of 11 cents per share in dividends. 2019 saw the company dole out 61 cents per share. That’s a very healthy increase of 527% over that decade.
When the car tolls (or not)…
But alas, 2020 was a dire year for the company as many would-be motorists stopped commuting and travelling, stayed home and left Transurban’s network of tolled roads bare. To illustrate, the company’s last posted quarterly update for the 3 months to 30 September showed its overall daily traffic volumes came in at 34.5% below the same quarter in 2019.
So it was perhaps no surprise that Transurban only paid out a total of 31 cents per share in dividends in 2020. The picture was slightly brighter last year though, with the company upping its output to 36.5 cents per share. But even that metric is far below the company’s 2019 high watermark of 61 cents per share. As it stands today, the Transurban share price is offering a yield of 2.74%. That comes from its closing share price of $13.24 and the 36.5 cents per share in dividends it paid out over 2021.
So what does 2022 hold in store for income investors who own Transurban shares? Will it be a return to the glory days?
What are experts saying about Transurban’s dividend outlook?
Well, we don’t know for sure yet, of course. But we can take note of what some expert investors are predicting. As my Fool colleague James covered earlier this month, broker Morgans reckons the company will be able to keep ramping its dividends up, but in a slow-but-steady manner.
It is expecting the company to fork out 35 cents per share in FY2022, followed by payments worth 55.3 cents per share by FY2023. The latter would equate to a forward yield of 4.18% on current pricing. So it might be a while until Transurban’s glory days are back, if this analysis is to be believed. But no doubt shareholders will appreciate the progress the company has made on the income front since 2020 nonetheless.