If you take a glance at Bank of Queensland Ltd (ASX: BOQ) shares today, no doubt it won't take too long for you to notice the rather large dividend yield and, thus, passive income potential.
ASX bank shares are famous for their dividends, so at first, this might not come as too much of a surprise. But even amongst the ASX 200 banks, the passive income potential of BOQ shares is a standout.
Right now, this ASX bank is displaying a trailing dividend yield of 7.32%. This also comes fully franked, so grossed up with those full franking credits, we get a super-sized yield of 10.46%.
Going back to the 7.32%, that certainly looks pretty good against Commonwealth Bank of Australia (ASX: CBA)'s yield of 4.31% on Friday or even against National Austalia Bank Ltd (ASX: NAB)'s 5.64%.
But how much passive income will investors buying BOQ shares today receive over the coming 12 months?
Image source: Getty Images
How much passive income will BOQ shares pay out this financial year?
After all, a company's trailing dividend yield is built off of its previous dividends, not what it might pay out in the future.
Take an investor who bought $10,000 worth of BOQ shares a year ago. If they paid the $7.62 that BOQ was going for 12 months ago, they would have received 1,312 shares.
Now BOQ has paid out two dividends over the past year. The first was the interim dividend of 24 cents per share (fully franked, of course) from last November. The second was the final dividend of 20 cents per share that we saw more recently in June.
Together, those dividend payments will have seen our investor bag $577.28 of passive income over the past 12 months.
But what of the future? Say an investor spends $10,000 on BOQ shares today. What kind of passive dividend income can they expect to see over the coming year?
Well, that's a hard question to answer, mainly because no dividends are guaranteed. We don't know exactly how much a dividend will be until the company itself announces it.
The next 12 months could theoretically see the Bank of Queensland pay half, double (unlikely) or the same dividends as the previous 12 months. We could even see no passive income from the company.
But we can pencil in some scenarios. Let's say an investor spends $10,000 on BOQ shares today. That would get them 1,663 BOQ shares at the last share price of $6.01.
Will BOQ investors get a dividend rise or a cut this year?
If BOQ keeps its dividends at the same level as the past 12 months for the coming 12 months, this investor will enjoy $731.72 in passive dividend income over the coming year (hence the trailing dividend yield of 7.32%).
However, as we covered last month, one ASX broker is expecting a slight dip in Bank of Queensland's dividend generosity.
CBA's CommSec is predicting that BOQ will fork out a total of 42 cents per share in dividends over FY2024. That would be a cut for the 44 cents investors have enjoyed over the past 12 months.
Even so, if this prediction comes to pass, our investor with 1,663 BOQ shares would still enjoy a total of $698.46 in passive income over the coming year. That represents a forward dividend yield of 6.98%.
We won't actually get to find out what BOQ's next dividend will be until October. Unlike most ASX 200 shares, BOQ is skipping August's earnings season and will wait until October to report its full-year earnings. That's when we'll know what this bank's next payout will be worth.
But unless the bank surprises everyone, it's likely that BOQ shares will continue to be a meaningful source of passive income for at least the next year.
