Coles Group Ltd (ASX: COL) shares are a solid option for long-term passive income given the defensive nature of its products and how steadily its earnings grow over time.
Coles is not just a supermarket company, of course. It also has a number of other businesses including Coles Liquor, Liquorland, Coles Financial Services (insurance and credit cards) and a 50% share of Flybuys.
It has already increased its annual dividend per share each year since 2019 and the recent FY26 third-quarter update was pleasing – total group revenue rose 3.1%, with supermarket revenue growth of 4%.
Let's look at what experts think could happen in the next few years.
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FY26
Investors have already seen the performance of the business over the first six months of the 2026 financial year.
Coles reported group revenue growth 2.5% to $23.6 billion, underlying operating profit (EBIT) growth of 10.2% to $1.2 billion and underlying net profit growth of 12.5% to $676 million. That allowed the business to fund an interim dividend per share of 41 cents.
The projection on CMC Invest suggests the business could pay an annual dividend per share of 77.7 cents, though I suspect it will end up paying a dividend that comes to a whole cent – such as 77 cents or 78 cents per share.
The forecast represents potential year-over-year growth of 12.6% compared to FY25. The projected payment for FY26 could be a grossed-up dividend yield of 5.1%, including franking credits, at the time of writing.
FY27
The dividend growth is expected to continue in the 2027 financial year for owners of Coles shares, which could be exactly what long-term shareholders are hoping for.
The FY27 annual dividend per share is projected to rise by 9.7% year-over-year next financial year to 85.2 cents per share, which would be another pleasing year of growth for investors.
At the time of writing, this translates into a potential grossed-up dividend yield of 5.6%, including franking credits.
FY28
The last year of this series of projections is expected to have the best dividend of all for owners of Coles shares.
The FY28 annual dividend per share is forecast to rise by 6.8% to 91 cents per share. I expect that will be comfortably above inflation, so that looks like a pleasing rate of payout growth to me. It would also mean the annual dividend grows by 17% between FY26 and FY28
The predicted payout translates into a possible grossed-up dividend yield of 6%, including franking credits, at the time of writing.
Overall, this could be a useful time to consider Coles shares for the long-term.
