If I invest $10,000 in Goodman shares, how much dividend income will I receive?

The value of Goodman shares has soared, but what about dividends?

| More on:
Male hands holding Australian dollar banknotes, symbolising dividends.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Goodman Group (ASX: GMG) shares are $33.37, down 1.3% in late afternoon trading on Tuesday.

Goodman is Australia's largest real estate investment trust (REIT).

The company specialises in industrial real estate. So, things like data centres, warehouses, logistics facilities, business parks, and so on.

That's hot property right now given the expanding digital economy and rising use of artificial intelligence.

The stock is having a rocking year so far, up 33% already in 2024 and rising at nearly quadruple the rate of its property sector peers over the past 12 months.

The ASX REIT capped off this performance with a new 52-week high of $34.07 last Thursday.

So, shareholders are surely cheering these capital gains, but what about dividends (or distributions, in the case of REITs)? Are they rising, too?

How much will Goodman shares pay in 2024?

The consensus analyst forecast published on CommSec is for Goodman shares to pay 30 cents per share in total annual distributions this year and in 2025.

That's what Goodman has paid shareholders every year since 2019.

The analysts expect a slight rise to 31.6 cents per share in 2026.

A $10,000 budget (minus a brokerage fee of $5) will buy you 299 Goodman shares at the current price.

Total spend = $9,977.63.

If we multiply 299 shares by 30 cents, we get a total annual distribution of $89.70 and a yield of 0.89%.

In 2026, the slightly higher payment will give us a total annual distribution of $94.50 and a yield of 0.95%.

Why aren't Goodman distributions rising?

A significant reason is that Goodman prefers to use most of its retained earnings "to fund investment in the business to support the development growth in a financially sustainable manner".

In its 1H FY24 results, Goodman Group reported a 29% year-over-year increase in operating profit to $1.13 billion. Development earnings were a strong contributor, increasing by 33.6% to $804.7 million.

In a statement, the company said many of its sites have been repurposed for larger scale and higher value projects. It has 85 property development projects worth $12.9 billion in the pipeline, with data centres making up 37%.

CEO Greg Goodman said:

Data centres will be a key area of growth and the acceleration of data centre activity is a
catalyst for the Group to consider multiple opportunities to enhance its returns.

We continue to assess the Group's capital allocation to both existing and potential opportunities to provide the best risk-adjusted returns.

Key to this will be the active rotation of our capital to fund sustained earnings growth over the
long term.

This strategy means shareholders are more likely to see growth in their earnings per share (EPS) instead of their dividends per share (DPS).

The consensus analyst forecast for EPS is $1.07 per share in 2024.

This is forecast to rise to an EPS of $1.188 per share in 2025 and $1.321 per share in 2026.

Motley Fool contributor Bronwyn Allen has positions in Goodman Group. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

Man holding out Australian dollar notes, symbolising dividends.

Here's the current ASX dividend yield on the Vanguard Australian Shares ETF (VAS)

How much passive income can one expect from this popular index fund?

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Dividend Investing

NAB stock: Should you buy the 4.7% yield?

Do analysts think this banking giant is a buy for income investors?

Read more »

Person handing out $100 notes, symbolising ex-dividend date.
Dividend Investing

The smartest ASX dividend shares to buy with $500 right now

Analysts have put buy ratings on these shares for a reason.

Read more »

Woman calculating dividends on calculator and working on a laptop.
Dividend Investing

1 ASX dividend stock down 17% to buy right now

Analysts see a lot of value and big dividend yields in this beaten down stock.

Read more »

Excited woman holding out $100 notes, symbolising dividends.
Dividend Investing

3 high-yield ASX 300 dividend stocks to buy for your income portfolio

Analysts expect big dividend yields from these buy-rated shares.

Read more »

A golfer celebrates a good shot at the tee, indicating success.
Dividend Investing

These ASX dividend winners keep giving investors a pay rise

These stocks have built an impressive consecutive dividend growth streak.

Read more »

a man in a business shirt and tie takes a wide leap over a large steel trap with jagged teeth that is place directly underneath him.
Dividend Investing

3 ASX value traps I wouldn't buy for dividends right now

I'd stay away from these shares if you don't want a nasty dividend surprise.

Read more »

Smiling woman holding Australian dollar notes in each hand, symbolising dividends.
Dividend Investing

2 ASX passive income shares paying 8% and 13% yields

I think both these high yielding ASX dividend stocks offer long-term passive income potential.

Read more »