Down 5% in 2 years, does the Transurban share price reflect the 2024-26 dividend forecast?

Are investors missing something with the Transurban dividend?

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It hasn't been a very pleasant two years for owners of the Transurban Group (ASX: TCL) share price.

Today, shares of this ASX 200 toll road operator are going for $12.90 each (at the time of writing). This time last year, you could have bought those same shares for $14.11. In March 2022, they were going for $13.58.

This means that Transurban shareholders have endured a loss of 8.6% over the last 12 months, and 5% over the past two years.

But most investors who buy shares of this toll road operator probably don't do so for the explosive capital growth opportunity. With its inflation-hedged contracts ensuring regular toll price increases, investors tend to flock to Transurban for steady dividend returns.

Indeed, the stagnant Transurban share price has ensured that this company today offers a compelling dividend yield of 4.77% (albeit without franking credits attached). So does the current Transurban share price reflect what this company might pay out in dividends over the coming year or two?

What kind of dividends will Transurban shares payout going forward?

Naturally, it's almost impossible to predict what kinds of dividends a company will pay out in the future before said company actually announces a payment. Remember, no company is under any obligation to fund dividends at a certain level, or indeed at all.

But Transurban's revenues (and thus dividend ability) are easier to predict than most, thanks to the predictability of traffic volumes.

So let's see what some experts think.

Just yesterday, my Fool colleague James covered the views of ASX broker Citi. Citi gave Transurban shares a buy rating, along with a 12-month share price target of $15.60. Citi partly based that on a prediction that Transurban would be able to fork out a total of 63 cents per share over the 2024 financial year, rising to 65 cents per share over FY2025.

If accurate, this would mean Transurban shares would be trading on a forward yield of 5.04% on that FY2025 figure.

CommSec projections largely agree with Citi's numbers too. The brokerage platform is pencilling in similar amounts in dividends per share over the coming year or two. CommSec has a total of 62.1 cents per share in dividend for FY2024, rising to 65.4 cents for FY2025 and 68.7 cents for FY2026.

It's hard to say for sure if the Transurban share price currently reflects these forecasts. But if they are accurate, I doubt any shareholder will complain.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Sebastian Bowen 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 Transurban Group. The Motley Fool Australia has no position in any of the stocks mentioned. 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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