Owning Wesfarmers Ltd (ASX: WES) shares has been a smart move over the long-term because of how it has steadily grown its profit and dividends for investors.
Past performance is not a guarantee of future performance, of course. Excitingly, analysts expect that the business could continue to please shareholders with steady progress over time.
Forecasts are not guaranteed to become the reported numbers, but I think they're very interesting to look at. So, let's look at the potential payouts over the next few financial years.
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FY26
The 2026 financial year is nearly over and it has already paid its FY26 half-year dividend, but we don't yet know what the annual dividend per share will be.
According to the forecast on CMC Invest, the business is expected to pay an annual dividend per share of $2.20 in FY26. That translates into a forward grossed-up dividend yield of 4.4%, including franking credits, at the time of writing for owners of Wesfarmers shares.
I think it's quite likely that the business can pay something like this because the Middle East conflict and its flow-on effects may not have fully impacted the company.
FY27
Analysts are expecting the company to hike its payout in the next financial year, which is pleasing considering the impacts that could happen amid elevated inflation and higher interest rates.
Pleasingly, Kmart and Bunnings are seen as product price leaders and this could see an increase in market share and possibly higher revenue. Bunnings and Kmart achieve extremely high returns on capital (ROC).
The forecast on CMC Invest suggests the business could pay an annual dividend per share of $2.396 in FY27. At the time of writing, that translates into a grossed-up dividend yield of 4.8%, including franking credits, at the time of writing.
FY28
The final year in this series of projections suggests the business could deliver yet another dividend increase.
According to the projection on CMC Invest, the company is forecast to pay an annual dividend per share of $2.57. That translates into a possible grossed-up dividend yield of 5.1%, including franking credits, for owners of Wesfarmers shares.
If the business does that, the annual dividend per share could increase by around 17% between FY26 and FY28.
Of the major ASX blue-chip shares, Wesfarmers is one of the ones I'm most confident will be able to increase its dividend in each of the coming years because of how well suited its main retail businesses are to help customers in the current climate. Plus, its exposure to lithium mining with the rising lithium price is also beneficial.
Overall, the outlook seems positive for the company.
