Last week was a good one for Woodside Energy Group Ltd (ASX: WDS) shareholders, with the market giving them a couple of gifts.
The first was a stronf rise in the Woodside share price after oil prices climbed again in response to news that OPEC will cut production by 2 million barrels per day in November.
Woodside dividend
Another gift that shareholders received was the energy giant's latest interim dividend.
In August, when Woodside released its half year results, the company reported a massive 414% increase in underlying net profit after tax to US$1,819 million. This was driven by higher realised prices and the addition of the BHP Group Ltd (ASX: BHP) petroleum assets.
In addition, the company generated US$2,568 million of free cash flow during the half, which allowed the Woodside board to declare a fully franked interim dividend of 109 US cents per share or 160 Australian cents per share.
This represented 80% of underlying net profit plus 80% of the merger completion payment adjusted for working capital, which was the equivalent to returning approximately 81% of free cash flow.
Are there more big paydays to come?
According to a recent note out of Citi, its analysts are expecting more of the same in the second half and in FY 2023.
In respect to the former, the broker has pencilled in a fully franked full year dividend of 325 Australian cents per share. This suggests a final dividend in the region of 165 Australian cents per share for the second half, which alone represents a very generous 4.7% yield.
What about in 2023?
Looking even further ahead, Citi is forecasting more big dividends in FY 2023 for Woodside shareholders.
It is expecting the energy company to pay a 360 Australian cents per share fully franked dividend. This will mean a massive 10.3% dividend yield based on the latest Woodside share price.
Citi also sees modest upside for its shares at present. It currently has a buy rating and $36.50 price target on them.
