Woolworths Group Ltd (ASX: WOW) shares have had their fair share of ups and downs over the past couple of years. Far more than most ASX 200 blue chip stocks, as it happens.
After riding out the 'Masters' hardware store debacle in 2015, Woolworths shares managed to re-establish a reputation for defensive earnings and stable dividends in subsequent years. The period between mid-2016 and mid-2021 was one of the best in the company's long history. It saw Woolworths' shares rise from about $17 each to the (still-reigning) record high of $42.47 that we saw in August of 2021.
But sadly, it was not to last. Since those 2021 peaks, it's been mostly a one-way street for Woolworths, and that way was not up-and-to-the-right.
A series of unfortunate events began unfolding for the company. Its Big W and New Zealand divisions continued to weigh on the company's financials, which were not assisted by a slow erosion of its market share at the benefit of arch-rival Coles Group Ltd (ASX: COL). Former CEO Bradford Banducci's exit in 2024 was also not received well by the markets. Nor were the company's two earnings reports, for that matter.
This all came out in October last year, when Woolworths shares hit a six-year low of $25.51.
But we are not here to talk about Woolworths' 2020s rough patch. So let's get to the dividends.
What kind of dividend income are Woolworths shares paying out?
Like the company's share price itself, the dividends from Woolworths have been through some swings and roundabouts of their own in recent years. Unlike Coles, which has made a point of delivering slow and steady annual increases, Woolworths' payouts went from an annual total of $1.08 per share in 2021 to 92 cents in 2022. Then back to $1.04 in 2023 and again in 2024.
2025 saw this absence of a trend continue. The company funded an April interim dividend worth 39 cents per share, followed by September's final dividend worth 45 cents per share. That annual total of 84 cents per share was the lowest paycheque investors have banked since 2017.
At yesterday's closing share price of $30.59, that 84 cents gives Woolworths shares a trailing dividend yield of 2.75%.
In some potentially good news for investors, though, this dividend dip might be short-lived. Last week, my Fool colleague Grace looked at analyst predictions that Woolworths could spend the next few years hiking its dividends, with a potential payout of $1.35 per share by FY2028 pencilled in.
If accurate, that would give Woolworths shares a forward FY2028 yield of well over 4% today…But we'll have to wait and see what the company's next set of earnings brings to its dividend investors.
