Own Transurban (ASX:TCL) shares? Here’s what its 2022 dividends might look like

What dividends does this company have under the hood?

| More on:
piggy bank at end of winding road

Image source: Getty Images

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.

Should you invest $1,000 in Transurban right now?

Before you consider Transurban, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Transurban wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Sebastian Bowen 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 Bruce Jackson.

More on Dividend Investing

a farmer pats a small beef cattle bovine on the head in a green field with trees in the background.
REITs

I plan to hold this quality ASX dividend share forever. Here’s why.

Rural Funds is a high-quality ASX dividend share in my opinion. I plan to own it for a long time.

Read more »

one hundred dollar notes blowing in the wind representing dividend windfall
Dividend Investing

Top ASX dividend shares to buy in May 2022

In times of market turbulence, many investors seek the potential shelter of dividend shares.

Read more »

investor looking at asx share price online with cash pouring from computer screen
Dividend Investing

2 ASX 200 dividend shares to buy according to a top broker

A top broker is positive on these dividend shares...

Read more »

Gold piggy bank on top of Australian notes.
Dividend Investing

How does the ANZ dividend compare to the other ASX 200 banks?

ANZ is expected to pay a large dividend in FY22. How big will it be?

Read more »

A youngA young boy dressed as a nerd wears a makeshift helmet and invention which uses many calculators to compute his solutions.
Dividend Investing

What is the dividend yield on IAG shares in May?

Do IAG shares really offer a 4% dividend yield? Let's take a look.

Read more »

Miner holding cash which represents dividends.
Dividend Investing

How big will the Rio Tinto dividend be in 2022?

Let's analyse and find out.

Read more »

Close-up photo of a back jean pocket with Australian dollar bills in it and a hand reaching in to collect the notes
Dividend Investing

Hoping to bag the next Macquarie dividend, here’s what you need to do

Macquarie shares are about to trade ex-dividend soon.

Read more »

A woman holds out a handful of Australian dollars.
Dividend Investing

The Soul Patts dividend is being paid today. Here’s what you need to know

Payday time has come for Soul Patts shareholders.

Read more »