Putting your money to work in the share market is a great way to earn a passive income. Especially given the potential yields on offer from some ASX 200 shares.
Woodside Energy Group Ltd (ASX: WDS) shares, for example, have been tipped to reward shareholders with some very big fully franked dividend yields in the near future thanks to the successful merger with the petroleum operations of mining behemoth BHP Group Ltd (ASX: BHP) and strong oil prices.
But what would it take to earn $500 of monthly passive income from Woodside shares?
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Passive income from Woodside shares
According to a recent note out of Citi, its analysts are forecasting fully franked dividends of $2.66 per share in FY 2023 and then $2.60 per share in FY 2024.
Based on the current Woodside share price of $34.23, this implies yields of 7.8% and 7.6%, respectively.
If we wanted to generate enough to provide us with $500 of passive income each month, we would need to receive $6,000 of dividends a year.
This would mean we would need to own approximately 2,256 Woodside shares this year and 2,308 shares next year, based on Citi's forecasts.
This isn't chump change unfortunately. It would require an investment of approximately $77,222 in FY 2023. Investors would then need to put a further $1,780 into Woodside shares in FY 2024 to keep generating the desired level of income.
But it certainly could be worth it if you have the funds available. After all, investing that $77,222 into a 12-month term deposit is likely to yield almost half as much based on the current rates being offered by the big four banks.
And there's no potential for capital gains with term deposits. Whereas analysts at Ord Minnett currently have an accumulate rating and $44.50 price target on Woodside's shares.
This implies potential upside of 30% for investors from current levels. Which would turn that $77,222 investment into just over $100,000.
