If I buy 1,000 ANZ shares, how much passive income will I receive?

Let's see how much income this banking giant's shares could provide.

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Man holding a calculator with Australian dollar notes, symbolising dividends.

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ANZ Group Holdings Ltd (ASX: ANZ) shares are traditionally a popular option for passive income investors.

This isn't surprising.

After all, the banking giant regularly shares a good portion of its sizeable profits with its shareholders every six months.

For example, in FY 2023, ANZ's solid financial performance allowed the bank to pay an interim dividend of 81 cents per share and then a final dividend of 94 cents per share. The latter comprised an 81 cents per share dividend partially franked at 65% and an additional one-off unfranked dividend of 13 cents per share.

This brought the total dividends for FY 2023 to 175 cents per share, which represents a dividend payout ratio of 71% of cash profit from continuing operations.

But those dividends have been and gone. What sort of passive income could be coming next for investors that buy ANZ shares today? Let's find out.

Passive income from ANZ shares

Let's imagine that you buy 1,000 ANZ shares, let's see what income you could receive from this sort of investment.

With the ANZ share price currently trading at $28.78, it would set you back $28,780 to buy 1,000 units. That's not a small investment but would it be worth it?

Well, according to a note out of Goldman Sachs, its analysts expect the bank to pay shareholders dividends of $1.66 per share in FY 2024, FY 2025, and FY 2026.

If Goldman is on the money with its estimates, this will mean passive income of $1,660 for investors over the next 12 months from their 1,000 ANZ shares.

And given how Goldman expects ANZ to continue paying the same amount for the foreseeable future, you can likely expect to receive the same amount of income from your shares in the following 12 months.

Should you invest?

While Goldman Sachs has a buy rating on ANZ's shares, its price target of $28.15 is actually lower than where they trade today.

As a result, this could make it worth keeping your powder dry for the time being and waiting for a better entry point.

Though, it is worth noting that Ord Minnett sees reasonable upside for the bank's shares. Despite only having a hold rating, its price target of $31.00 implies potential upside of almost 8%.

In addition, Ord Minnett agrees that a $1.66 per share dividend is coming this year, but expects an increase to $1,70 per share in FY 2025.

Motley Fool contributor James Mickleboro 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 Goldman Sachs 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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