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?

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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.

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