The Boral Limited (ASX: BLD) share price has been one of the stranger performers in 2022 thus far. Or so it appears from a quick look at this ASX 200 construction company's share price. Back in early February, the company was rising high at over $6.50 a share, having appreciated almost 15% over the week leading up to 3 February.
But between 3 and 4 February, the company's shares seemingly cratered by over 40%. Bad earnings? Turmoil at the company's top? The answer (thankfully for shareholders) was none of the above.
This drop was actually the result of Boral completing a monster $3 billion capital return program. After Boral unloaded several of its businesses, including North American Building Products and Meridian Brick, it opted to return the capital straight to shareholders, in the process becoming a far smaller company. As we covered at the time, this saw Boral give each investor a $2.65 per share capital return, which partially explains why its share price seemingly cratered at the time.
Today, Boral is being priced at $3.31 a share, up 0.61% at the time of writing.
But simultaneously, Boral also resumed paying out dividends. After ditching shareholder payouts in the second half of 2020 and all of 2021, 2022 has seen the company pay out a single unfranked dividend of 7 cents per share. That gives Boral a trailing dividend yield of 2.11% on the current share price.
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Is the Boral share price a buy for dividend income?
So if Boral pays out another dividend of equal value later this year, it will likely boost the company's yield to over 4%. So that begs the question: is Boral a buy today for dividend income? Well, let's take a look at what one ASX broker reckons.
Investment bank and broker JPMorgan looked at Boral last month. It rated the company as Neutral, albeit with a 12-month share price target of $4, which implies an upside of over 20% over the next year.
But turning to dividends, JPMorgan is confident they will continue to flow out of the company. It is anticipating total dividends for FY22 of 12 cents per share, which would mean another dividend later this year amounting to 5 cents per share. For FY23, it is expecting another 12 cents per share in dividends, before a rise to 14 cents per share in FY24. That implies a potential forward yield of 3.63% for both FY22 and FY23, and 4.23% for FY24.
Nothing to shoot the lights out on an income basis, one could say. But it's still a pretty meaty dividend for ASX standards, if JPMorgan's predictions turn out to be true.
At the current Boral share price, this ASX 200 construction materials company has a market capitalisation of $3.63 billion.
