Investors interested at the current Suncorp Group Ltd (ASX: SUN) share price may want to know what the passive income could be in the foreseeable future.
Suncorp is one of the biggest insurance businesses in Australia with a number of brands including AAMI, GIO, Bingle, Apia, Shannons, Terri Scheer, CIL Insurance, Vero, Essentials by AAI, and AA Insurance.
Insurance can be a fairly volatile industry, depending on what happens with catastrophes each year and other elements such as premium rises.
Recent analysis by Macquarie showed that insurance prices have continued to increase strongly, with new home insurance rising 5.7% year over year, small and medium (SME) insurance increasing 7.8% and compulsory third party (CTP) pricing increased by an average of 4.2%.
These numbers are supportive drivers for the company's total gross written premium (GWP).
Let's take a look at what dividends are predicted for the insurance giant.
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Suncorp's predicted passive income
The projection on Commsec suggests the business could pay an outsized dividend in FY25.
Suncorp is projected to pay an annual dividend per share of $1.02 for FY25. At the current Suncorp share price, that translates into a fully dividend yield of 5% and a grossed-up dividend yield of 7.1%, including franking credits.
However, the 2026 financial year may not be as rewarding for shareholders compared to FY25. The projection on Commsec suggests a possible payout of 85 cents per share in FY26, which translates into a fully franked dividend yield of 4.1% and a grossed-up dividend yield of 5.9%, including franking credits.
Is this a good time to invest?
Analysts certainly seem to think the Suncorp share price is attractive.
According to a collation of analyst opinions by Commsec, there are currently seven buy ratings on the business, one hold rating and no sell ratings.
There aren't many S&P/ASX 300 Index (ASX: XKO) shares where analysts have a more positive view on the company than that.
At the current Suncorp share price it's valued at 13x FY25's estimated earnings and 18x FY26's estimated earnings.
Overall, analysts seem confident on the business. However, with inflation now settling down, I think the earnings growth outlook isn't as appealing as it was a couple of years ago.
While it could be a decent option for passive income, there are a number of other ASX dividend shares that would appeal to me more.
