If I invest $10,000 in Pilbara Minerals shares, how much passive income will I receive in 2024?

Is this lithium miner a good option for income investors?

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Pilbara Minerals Ltd (ASX: PLS) shares have been a big favourite of growth investors in recent years.

And while the lithium miner's growth is by no means over, its strong cash generation means it can now be considered as an option for income investors alongside the likes of BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO).

But just how good could its dividends be in the coming years? How much passive income would a $10,000 investment generate for investors?

Passive income from Pilbara Minerals shares

Firstly, if you were to invest $10,000 into Pilbara Minerals shares, you would end up owning 2,747 units.

Let's now see what sort of passive income these shares could provide investors in 2024.

According to a note out of Macquarie from last week, its analysts are forecasting a fully franked dividend of 16 cents per share in FY 2024. This equates to a ~4.4% dividend yield at current prices.

If this forecast proves accurate, it would mean your 2,747 units would provide an income of approximately $440.

Pleasingly, according to Macquarie, it will get even better in 2025. The broker is expecting Pilbara Minerals to increase its dividend to 31 cents per share in the following financial year.

This equates to a very generous fully franked 8.5% dividend yield, which would generate approximately $850 in passive income from a $10,000 investment.

But wait, there's more! Macquarie believes that Pilbara Minerals' shares are severely undervalued at current levels. It has an outperform rating and a $7.10 price target on them.

If the company's shares were to rise to that level, your 2,747 units would be worth a sizeable $19,503.70.

Including FY 2024's forecast dividends, that would mean the almost-doubling of your original investment. Let's hope the broker is on the money with its recommendation!

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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