Owning Woodside Energy Ltd (ASX: WDS) shares has usually been a good choice for passive income each year. The next year or two could be particularly rewarding with the ASX energy share's dividend payouts.
Woodside is one of the largest ASX-listed oil and gas companies in the Asia Pacific region; it's a significant LNG producer. The business has projects around the world, in the Asia Pacific, Africa, and North America regions.
The company is exposed to volatile energy prices, but there's a certain level of demand for energy each year, so I'd say Woodside has a certain level of defensive base earnings. But, its dividend could be very rewarding in the next couple of years.
Let's take a look at what it would take to unlock $10,000 of annual passive income.
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How many Woodside shares do I need to buy for $10,000 of passive income?
Woodside has paid dividends to shareholders for many years and the dividend has bounced around. But, the dividend yield is usually appealing to investors.
There are not many ASX blue-chip shares that can match the attractiveness of Woodside's dividend yield, partly because it trades on a relatively low price/earnings (P/E) ratio. But I'm not expecting a consistent dividend from here.
Analysts are expecting the business to deliver a sizeable dividend over the next couple of financial years amid ongoing project progress by the business and potentially elevated energy prices because of events in the Middle East.
The Commsec projection suggests the business could deliver an annual dividend per share of $2.22 in the 2026 financial year. It may be better to look at FY27, since the payout is forecast to be larger and it won't be long until Woodside's 2027 financial year starts.
According to the projection on Commsec, the business is expected to pay an annual dividend per share of $2.34 in FY27. That translates to a dividend yield of 7.1% excluding franking credits and 10.1% including franking credits.
To receive $10,000 of passive income related to FY27, an investor would need 4,274 Woodside shares excluding the franking credits or 2,992 Woodside shares including the franking credits.
Is it time to invest in the ASX energy share?
There have been 10 analyst ratings on the business within the last three months, with three of those ratings being a buy, six ratings being a hold and one rating being a sell.
The average price target of those 10 ratings is $31.31, implying a possible decline of 5% within the next 12 months, from where it is at the time of writing.
Woodside seemingly isn't great value right now, so other ASX shares may be more attractive opportunities to buy today.
