Westpac Banking Corp (ASX: WBC) shares have traditionally been a great source of passive income for investors.
Each year, the bank shares a portion of its profits with shareholders in the form of dividends.
In fact, last week the company paid its final dividend of FY 2023. Westpac returned a fully franked 72 cents per share dividend.
This brought Westpac's total dividends for the financial year to $1.42 per share, which equates to a total return of $5 billion.
To put that into context, Westpac's dividends would be enough to buy Flight Centre Travel Group Ltd (ASX: FLT) and still have almost $700 million leftover.
But what's next for Westpac shares and its dividend? Will the bank still be a good source of passive income in 2024?
Let's take a look and see what could happen to a $10,000 investment in the bank's shares.
How much passive income could you generate from Westpac shares?
If you were to invest $10,000 in Westpac shares, you would end up owning 438 units.
According to a recent note out of Ord Minnett, its analysts are expecting Westpac to increase its dividend slightly in FY 2024. They are forecasting a fully franked $1.45 per share dividend for the period.
This means that your 438 shares would generate $635.10 in passive income over the 12 months.
But the returns may not stop there. Ord Minnett currently sees major upside potential for the bank's shares next year. Its note reveals that the broker has an accumulate rating and a $28 price target on them.
This implies a potential upside of 22.5% and would mean your holding is worth $12,264.
And if we throw in the dividends, that would bring the total potential value of your investment to approximately $12,900.
All in all, the bank could prove to be a great option for income investors if Ord Minnett is on the money with its recommendation.
