The Coles Group Ltd (ASX: COL) dividend is among the most popular options on the Australian share market for income investors.
Thanks to its defensive qualities, positive outlook, and generous payout ratio, the supermarket giant's shares are found in countless income portfolios up and down the country.
In light of its popularity, investors may be curious about what is expected from the Coles dividend in the coming years. Let's take a look!
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Where is the Coles dividend heading?
Firstly, let's start with what has already been paid. In FY 2021, the company declared a fully franked 61 cents per share dividend.
According to a note out of Citi, its analysts expect a small year on year increase to 63 cents per share in FY 2022. Based on the current Coles share price of $18.79, this will mean a yield of 3.35% for investors.
The good news is that the broker is then expecting a big jump in both its earnings and its dividend in FY 2023. Citi is forecasting a 72 cents per share fully franked dividend for that financial year. At current levels, this will mean a yield of approximately 3.8% for investors.
Finally, another increase to the Coles dividend is expected in FY 2024. Citi is forecasting a fully franked 78 cents per share dividend. This will mean an attractive 4.15% dividend yield for investors that year.
Can its shares climb higher?
Citi sees only modest upside in the Coles share price following its recent gains.
The note reveals that its analysts currently have a buy rating and $19.30 price target on its shares.
Though, the broker concedes that it sees "upside risk to our forecasts if the [food inflation related shopping] volume response is muted."
