Is it possible to earn $5,000 a year in passive income from just 710 shares in this leading ASX dividend stock?
Indeed it is!
S&P/ASX 200 Index (ASX: XJO) financial stock Macquarie Group Ltd (ASX: MQG) counts among Australia's dividend stars.
That's partly because the company has paid shareholders two partly franked dividends every year since 2013.
And when it comes to passive income, reliability is important.
Founded in 1969, Macquarie listed on the ASX in November 2007.
Atop banking those dividends, of course, we also want to own companies whose share price goes up over time.
And Macquarie ticks that box handsomely.
While the share price came under pressure for the first three quarters of 2023 and has retraced over the past two weeks, Macquarie shares are still up 16% since 13 November, closing yesterday at $184.48 apiece.
So, let's have a look at those dividends.
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Targeting $5,000 a year in passive income from Macquarie shares
Before we dig into the passive income, please note that the yields you generally see quoted are trailing yields. Future yields may be higher or lower depending on a range of company-specific and macroeconomic factors.
Also, while we're discussing just one dividend stock here, a proper income portfolio should contain at least 10 stocks. Ideally these will operate in different sectors and locations. That kind of diversity will lower the risk of our passive income stream taking a big hit if any single company or sector runs into short-term headwinds.
With that said, Macquarie paid a final dividend of $4.50 a share on 4 July. That was up 29% from the prior year's final dividend of $3.50 a share.
The ASX 200 financial stock paid an interim dividend of $2.55 on 19 December. That one was down 15% from the prior interim dividend of $3.00 a share.
The passive income dip came amid a 39% year on year fall in the company's half-year net profit after tax (NPAT), which came in at $1.415 billion.
Both of the past two dividends were franked at 40%.
A little back-of-the-napkin maths then tells us Macquarie paid out $7.05 a share in partly franked dividends over the past 12 months.
So, if we were to buy 710 shares today, that would equate to an annual passive income of $5,005 and change!
