If it's some welcome extra passive income you're after, you might want to have a look at AGL Energy Ltd (ASX: AGL) shares.
On Monday, shares in the S&P/ASX 200 Index (ASX: XJO) energy stock were trading for $8.18 apiece.
Now, that sees the AGL share price down 18.6% over the past 12 months, underperforming the 4.3% one-year gains posted by the ASX 200.
However, the company boosted its interim 2026 dividend (paid on 26 March) by 4.3% to 24 cents a share. If we add in the final dividend of 25 cents a share (paid on 25 September), that equates to a full-year passive income payout of 49 cents a share.
At Monday's AGL share price, this sees the stock trading at a 6% fully-franked trailing dividend yield. Taking those franking credits into account, that works out to a grossed-up yield of 8.6%.
And looking ahead, Shaw and Partners' James Bills expects AGL is well-positioned to keep paying market-beating dividends and return to share price growth (courtesy of The Bull).
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Should you buy AGL shares for passive income?
"The power generator has undergone a significant transformation in recent years," said Bills, who issued a buy recommendation on AGL shares.
He noted:
It's improved the balance sheet, simplified operations and is positioned to benefit from Australia's ongoing energy transition. The company continues to generate consistent cash flows, while investing in renewable generation and energy storage initiatives.
As for that passive income, Bills said:
AGL also offers an attractive dividend yield, providing investors with a combination of income and potential capital growth. The stock presents an appealing opportunity for long term investors.
What's the latest from the ASX 200 energy stock?
On 6 May, AGL shares caught investors' attention following the company's Macquarie Conference presentation.
Notably for passive income investors, the company narrowed its full-year FY 2026 earnings and profits guidance ranges, lifting the lower end in both cases.
AGL said it now expects underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) to be between $2.06 billion and $2.18 billion (previously between $2.02 billion and $2.18 billion).
And the company expects FY 2026 underlying net profit after tax (NPAT) will be between $610 million and $680 million (previously between $580 million and $680 million).
The ASX 200 energy provider noted:
The update to guidance reflects the continued strong operational and financial performance of the business since the half year results, with improved plant availability, stabilisation of consumer margins and disciplined cost management.
AGL is well placed for at least the next three months during the global fuel crisis, with current diesel storage near capacity for the generation assets, and expects ongoing supply as an essential services provider.
