Wesfarmers Ltd (ASX: WES) shares have been paying good dividends to investors for many years. Shareholders may be wondering how much dividend income they're going to get over the next year or two.
There's no guarantee that a dividend will be paid, but if a business has historically been committed to paying dividends, then that could be a good indication that the shareholder payments will continue.
Dividends are decided by the board of a company, though the profitability of the business can have a big impact on whether the dividend is increased, cut, or maintained.
Although the Wesfarmers share price has dropped over the past year, the dividend income is predicted to continue to remain strong.
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Payout expectations
According to the dividend forecast on Commsec, Wesfarmers shares might pay an annual dividend per share of $1.86, which would represent a year over year increase of 3.3%.
If the company does pay that annual dividend per share, this would translate into a grossed-up dividend yield of 5.4% for FY23.
After that, the business is projected to grow the dividend again to $1.94 per share. That would represent a year over year increase of 4.3%, and it would be 7.8% higher than FY22.
At the current Wesfarmers share price, the FY24 grossed-up dividend yield could be 5.6%.
For readers that are interested, the FY25 estimated annual dividend per share is $2.02 per share. If that happened, it could be a 4.1% increase.
How likely is it that Wesfarmers will grow its dividend?
One of the company's aims is to grow the dividend over time. Wesfarmers said:
With a focus on generating strong cash flows and maintaining balance sheet strength, the group aims to deliver satisfactory returns as shareholders through improving returns on invested capital. As well as share price appreciation, Wesfarmers seeks to grow dividends over time commensurate with performance in earnings and cash flow. Dependent upon circumstances capital management decisions may also be taken from time to time where this activity is in shareholders' interests.
Foolish takeaway
Wesfarmers is one of the leading ASX blue-chip shares with a number of quality businesses like Bunnings, Kmart, Officeworks and Priceline. It may be able to keep paying good passive income for a number of years.
