It has been a rough time to own CSL Ltd (ASX: CSL) shares. At the time of writing, they have fallen by approximately a third in the last year, as the chart below shows.
As the biggest healthcare business in Australia, CSL has an important role to play in our society with its various healthcare treatments. While it is best known for its capital growth over the past decade, its fall could mean a better dividend yield for prospective investors.
Let's take a look at how large the dividend could be for owners of CSL shares between now and FY30.
FY26
The broker UBS recently attended CSL's capital markets day. UBS noted that CSL's comments suggest mid-single-digit sales growth strength for immunoglobulin (IG) over FY27 and FY28 can offset albumin, iron, and Seqirus.
UBS currently forecasts net profit after tax (NPAT) expansion of around 100 basis points (1%) across FY27 and FY28, lifting NPAT growth to high single digits. IG yield improvement from 'horizon 1' was confirmed at the capital markets day at 10%, with 6% achieved by FY26, as well as US$200 million benefits within CSL's cost saving target of US$550 million.
The broker also noted that CSL said 'horizon 2' is progressing following the FDA protocol proposal in June, with the US facility (with a US$1.5 billion cost) opening expected in FY30. Separately, CSL is targeting a reduction of addressable manufacturing costs of 11% by FY28.
UBS also pointed out that Seqirus is outperforming in a difficult US market where there has been a significant drop in US vaccination rates, partly offset by market share gains in Europe of people 65 and over.
According to the projection from UBS, the business could pay an annual dividend per CSL share of US$3.27 in FY26.
FY27
When analysing the Seqirus (vaccine) business as part of CSL's capital markets day, UBS wrote:
There is scope for a meaningful US recovery over the medium term with flu doses in FY26 around 30% below pre COVID vs other large market stabilizing at pre-COVID levels. However likely requires greater doctor support coupled with political pressure from a higher disease burden, with CSL not assuming a recovery in FY27/8. The largest long-term opportunity through new aTIVc (combined cell based and adjuvant vaccine) which should receive European regulatory approval in 2026, while a reducing number os COVID vaccinations limits the upside of its future mRNA product.
With the above also taken into account, the business is projected to hike its annual dividend again to US$3.66 per share.
FY28
In the 2028 financial year, owners of CSL shares could get an even bigger passive income payment.
The ASX healthcare share could deliver investors an annual dividend per share of US$4.10.
FY29
The 2029 financial year could be even stronger for shareholders, with a possible rise of the annual dividend per share to US$4.59.
FY30
The 2030 financial year could be the best year that shareholders have experienced for passive dividend income.
According to UBS' forecasts, investors could receive an annual dividend per share of US$5.15.
At the current CSL share price, that translates into a possible future dividend yield of 4.2%. While that's not a huge yield, it's solid considering CSL's yield has been below 2% for a long time.
