CSL Ltd (ASX: CSL) shares have done very well for investors over the long term. The CSL share price has lifted around 300% over the past decade. Is the CSL dividend forecast looking optimistic for the ASX healthcare share? I'm going to look at that in this article.
The company is known for many elements, including its vaccines, blood plasma collection and related products, and more. It's a very large biotechnology business with a market capitalisation of $134.6 billion.
CLS has achieved significant profit growth over the past decade, which has helped fund impressive dividend growth over that period. We're going to look at how far the broker UBS thinks the CSL dividend could rise.
FY24 projection
CSL had a solid start to the 2024 financial year. In the first half of FY24, revenue increased 11% to $8.05 billion and net profit after tax (NPAT) rose 17% to $1.9 billion, while underlying net profit (NPATA) rose by 11%.
For FY24, CSL expects underlying profit to be between $2.9 billion and $3 billion, representing growth of 13% to 17%.
UBS thinks the ASX healthcare share can achieve a dividend per share of US$2.60 in FY24, which would represent an increase of around 10%. In Australian dollar terms, that would be an annual dividend payout of $3.98 for CSL shares, which would represent a dividend yield of 1.5%.
How about FY25?
The ASX healthcare share is expected to see a good increase in profitability over the next few years.
UBS suggests the net profit could grow by 18.5% to $3.6 billion. The broker thinks the dividend might be hiked by another 10% to US$2.86 per share.
And FY26?
Next, the 2026 financial year could see more profit growth for the ASX healthcare share, which could rise 19.6% to US$4.3 billion.
If that impressive profit growth occurs, it could enable a 9.8% increase in the CSL dividend to US$3.14 per share.
Expectations for FY27
The 2027 financial year may see another good result for CSL, with a possible profit rise of 20%. If that happens, the dividend growth could be 10.2% to US$3.46 per share.
Finally, here's the FY28 forecast
It's a long way away, but the current suggestion by UBS is that CSL's profit could grow 10.9% to $5.7 billion in FY28. If CSL achieves that, it would mean the net profit could rise by almost 90% between FY24 to FY28.
CSL's dividend per share in FY28 could reach US$3.80 per share, which would be A$5.82. At the current CSL share price, that would be a dividend yield of 2.1%, which isn't exactly a huge yield, but would represent a good growth rate compared to FY24.
While it's impossible to know what's going to happen, CSL is giving itself a good chance of growth thanks to the billions of dollars it's investing in research and development to create new products and build new earnings streams.
