If you’re looking for big dividends, then South32 Ltd (ASX: S32) shares could be worth a closer look.
It has been tipped to reward its shareholders with some big dividends in the coming years.
What are analysts saying about South32 and its dividend?
According to a recent note out of Citi, its analysts are very bullish on South32 shares.
In response to the company’s strategy update at the end of last month, the broker has put a buy rating and $5.50 price target on its shares.
Based on the current South32 share price of $4.16, this implies potential upside of 32% for investors over the next 12 months.
But it gets even better. Citi is forecasting a fully franked 38 cents per share dividend in FY 2022 and a fully franked 40 cents per share dividend in FY 2023.
This implies huge yields of 9.1% in FY 2022 and 9.6% in FY 2023 for income investors.
What did the broker say?
Citi believes that the South32 share price is trading at a very attractive level compared to peers and highlights its exposure to in-demand metals.
The broker commented:
S32 held a strategy update today and there was little to change baseline forecasts save for higher FY23/24 capex. Costs pressures are evident – but are industry not company specific. S32 has production growth, trades at a discount to DCF and on low valuation multiples. What’s not to like compared to peers. While China near term commodity demand is a concern, the midterm outlook for key S32 metals is robust enough.
All in all, this could make South32 one to consider if you’re on the lookout for big dividends.