With Woolworths Group Ltd (ASX: WOW) shares managing to maintain strong dividend payouts throughout the pandemic-addled year of 2020, the stock attracted plenty of interest from passive income investors in 2021.
On 15 January 2021, you could have bought Woolworths shares for $33.49 apiece. By then shares in the S&P/ASX 200 Index (ASX: XJO) supermarket giant were up 17% from their May 2020 lows.
But you still could have bought 179 Woolworths shares for $6,000 with some pocket change left over.
Now from a share price perspective, you'd have seen that investment retrace.
The Woolworths share price closed Friday at $32.69. Selling at that price would see your $6,000 investment pared down to $5,851.51.
Of course, this doesn't include the passive income you were targeting.
So, let's add those dividends back in.
Targeting Woolworths shares for passive income
If you'd bought Woolworths shares in January 2021 and held onto them through today, you'd have been eligible to receive the past eight fully franked dividend payments. That includes the FY 2024 supersized final dividend of 97 cents a share.
All told, those eight dividend payments total $4.48 a share in passive income, with potential tax benefits from those franking credits.
This means your 179 Woolworths shares purchased in January 2021 will have returned $801.92 in passive income.
Now, let's add that $4.48 a share back into Friday's closing price of $32.69. This brings the accumulated value of the Woolworths shares you bought in January 2021 for $33.49 apiece to $37.17.
Highlighting the importance of passive income when investing in ASX shares, the accumulated value of those shares is up 10.9% rather than in the red.
What's this about a supersized final dividend?
On 28 August, Woolworths delighted passive income investors when management declared an all-time high final dividend payout of 97 cents per share. Fully franked, as always.
That consisted of a regular final dividend of 57 cents per share and a special dividend (gotta love those!) of 40 cents per share.
That special dividend came thanks to the $489 million Woolworths received for selling its remaining 5% stake in Endeavour Group (ASX: EDV).
Core financial metrics from the company's FY 2024 results included a 3.7% year-on-year boost in sales to $67.92 billion and a 3.4% increase in earnings before interest and tax (EBIT) to $3.22 billion.
As for what passive income investors might expect ahead, outgoing CEO Brad Banducci said on the day, "Sales momentum in FY 2025 has continued to improve across the group in line with improving customer scores."
