As an ASX bank share, and a big four bank at that, the Westpac Banking Corp (ASX: WBC) has a certain reputation as a company that pays out hefty dividends. That's despite Westpac serving up one of the worst years in terms of dividend payments in its history back in 2020. Due to the impacts of the onset of the coronavirus pandemic, Westpac was forced to skip one of its two biannual dividend payments entirely. That was the first time in decades Westpac missed a payment.
But now that 2020 is well and truly in the rear-view mirror, how is 2022 shaping up for Westpac dividends? Will this ASX bank give investors a dividend pay rise this year?
Well, let's first check out Westpac's recent dividend history.
So as we just discussed, 2020 was an awful year for income investors of Westpac. The bank paid out a sole, final dividend of 31 cents per share, fully franked. That compared very poorly with 2019's final dividend of 80 cents per share, and even worse against 2018's corresponding 94 cents per share dividend. But such was the impact of COVID, as well as a few other issues Westpac was dealing with at the time.
But last year saw the wheels start to hit the road again. Westpac was back to two dividend payments. Those were an interim dividend of 58 cents per share, and a final dividend of 60 cents per share, both fully franked.
Those two payments give the Westpac share price a trailing yield of 5.25% on current pricing. That happens to be the largest trailing yield out of any of the big four ASX banks right now.
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What will Westpac's next dividends look like?
But what does the future hold for Westpac's dividend? Well, we of course don't yet know for sure. But we can look at what one ASX investing expert is pencilling in.
Investment bank and broker Goldman Sachs is currently neutral on Westpac shares, albeit with a 12-month share price target of $26.24 a share, implying a potential upside of almost 17% over the next year.
But Goldman is also predicting a total of $1.22 in dividends per share for FY2022. That implies it is expecting Westpac's first dividend of 2022 to come in at 62 cents per share. For FY2023, Goldman is anticipating a total payout of $1.29 per share, which would presumably see another hike when Westpac announces its final dividend for 2022 later this year. For FY2024, Goldman is expecting yet another dividend hike, this time to $1.46 a share. That would imply a forward dividend yield of 6.5% on current pricing.
So that's what one expert has predicted will come to pass for the Westpac dividend. No doubt shareholders will be pretty pleased with those payouts if they do come to pass. We'll have to wait and see what Westpac pulls out of its hat though.
At the current Westpac Banking Corp share price, this ASX 200 bank has a market capitalisation of $82.43 billion.
