Pilbara Minerals Ltd (ASX: PLS) and its shares have come a very long way over the last decade.
Did you know that 10 years ago, lithium wasn't even on the menu for the mining giant? It was a tantalum-focused penny stock with an uncertain future.
In fact, almost 10 years to the day, the company's quarterly report revealed that the company issued 29,141,643 shares at 1 cent per new share to raise just $291,416.
Fast forward to today and those Pilbara Minerals shares would have a market value of over $125 million.
But that's not the only thing that has changed. Gone are the days of rampant cash burn. These days Pilbara Minerals has so much cash it has begun returning millions to its shareholders. This arguably makes it a good option for passive income investors who have a higher tolerance for risk.
With that in mind, let's take a look to see how much passive income you could generate from a $10,000 investment in the lithium miner's shares.
How much passive income could Pilbara Minerals shares generate?
First things first, if you were to invest $10,000 into Pilbara Minerals shares, you would end up with 2,326 units.
According to a note out of Macquarie, its analysts are expecting the company to reward its shareholders with fully franked dividends of 20 cents per share in FY 2024.
Based on the current Pilbara Minerals share price of $4.30, this represents a dividend yield of 4.65%. This would mean a $10,000 investment generates a passive income of $465.20.
Looking ahead, Macquarie expects a dividend increase to 35 cents per share in FY 2025. This is a sizeable 8.1% yield and would mean an income of $810 for investors.
It is also worth noting that the broker has an outperform rating and a $7.30 price target on Pilbara Minerals' shares. This suggests a 70% upside from current levels and would mean your 2,326 units have a market value of $16,979.80.
Not bad if you ask me!
