Owning Sigma Healthcare Ltd (ASX: SIG) shares could be a pleasing choice for long-term dividend income.
It may not have a reputation for being an ASX dividend share year, but if it's able to deliver year after year growth, then it could build a reputation for reliability.
There's no guarantee of how dividend payments are going to play out, but analysts are optimistic that the owner of the Chemist Warehouse, Amcal and Discount Drug Store brands could perform for investors. It has a presence in Australia and New Zealand, as well as countries including Ireland and the UAE.
FY26
The 2026 financial year is Sigma Healthcare's current financial year, so it's the most relevant for investors to know.
According to the forecast from the broker UBS, the owner of Chemist Warehouse is predicted to deliver an annual dividend per share of 4 cents.
UBS says that Chemist Warehouse, the key driver of Sigma Healthcare, is the leader in the attractive health and beauty market, which is growing at 6% per year, according to UBS' estimates.
Pleasingly, the broker expects Sigma Healthcare to continue gaining market share in the coming years. Due to leadership in price and range, regulatory advantages, compliance and its ability to fulfil online and in-store orders.
The sales growth, with both like-for-like (LFL) sales and store network expansion going well, is delivering operating leverage.
Chemist Warehouse LFL sales growth is expected by UBS to increase to 13.2% to in FY26. Its store count is forecast to grow at 33 per year because of franchisor support, acquisitions and international growth in existing and possibly new markets.
Combined with gross profit growth and the realisation of synergies after the merger, the company's sales should support operating profit (EBIT) margin growth, according to UBS. The broker predicts the EBIT margin can grow from 10.1% in FY26 and rise each year to 11.6% in FY30.
With all of that in mind, UBS predicts that owners of Sigma shares could receive an annual dividend per share of 4 cents in FY26.
FY27
Chemist Warehouse sales are expected to see LFL growth of 10.2% in FY27 and then high single digit growth through to the end of the decade thanks to an ageing population, health prioritisation, higher value medicines and greater category participation and spending per consumer in health and beauty.
This could help drive the company's annual dividend per share to 5 cents in FY27.
FY28
Sales, margins and profit could continue to rise in the 2028 financial year. This could help deliver a rise in the company's dividend per share to 6 cents.
FY29
The good times are predicted to continue into the 2029 financial year, giving the business even more economic firepower to increase the payout.
In FY29, UBS predicts the business could hike its payout again to 7 cents per share.
FY30
The final year of this series of projections could see the business decide to declare a dividend per share of 8 cents. If these forecasts prove correct, it would mean the dividend doubles between FY26 and FY30.
