Investors don't typically own Qantas Airways Ltd (ASX: QAN) shares for dividend income.
COVID-19 certainly led to some difficulties for the airline sector's profitability and the Middle East conflict has thrown up a lot of volatility, so it's no wonder the Qantas share price has noticeably dropped over the last few months.
But, it's quite possible the Qantas dividend could be significantly stronger than some investors fear amid the jet fuel impacts.
Let's look at how large the airline's dividend is predicted to be in the next few years.
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FY26
The 2026 financial year is almost over for Qantas, but we don't know yet how large the upcoming final dividend will be. That's likely to be revealed in August during reporting season.
Despite the negative impacts of the Middle East conflict, travel demand remained solid in the airline's most recent update. This could be essential for the business to deliver a solid dividend payout in the 2026 financial year (and beyond).
According to the projection on CMC Invest, the business is forecast to pay an annual dividend per share of 39.6 cents per share. At the time of writing, that translates into a forecast grossed-up dividend yield of 6.6%, including franking credits.
FY27
Time will tell how long the effects of the Middle East continue for airlines. But, the longer the Strait of Hormuz is shut, the more severe and longer-term the impact could be, particularly if fuel supply and inventory don't recover soon enough.
According to the projection on CMC Invest, the ASX travel share is forecast to pay an annual dividend per share of 40 cents. At the current Qantas share price, that translates into a grossed-up dividend yield of 6.7%, including franking credits, at the time of writing.
FY28
Owning Qantas shares in FY28 could see the business continue to deliver a rising annual dividend for investors.
The projection on CMC Invest suggests that the Qantas dividend per share could grow to 41.5 cents per share. At the time of writing, that translates into a grossed-up dividend yield of 6.9%, including franking credits.
While that's not the biggest dividend yield on the ASX, it is certainly a fairly high yield with expectations that the payout can slowly but steadily grow in the next few years.
The Qantas share price may well be undervalued at today's level, but short-term movements could be heavily impacted by Middle East developments. Therefore, other ASX shares could be even better picks for income.
