Shares in supermarket giant Woolworths Group Ltd (ASX: WOW) are a popular choice among investors seeking passive income.
Woolworths is classed as an ASX consumer staples stock, which means it is a structurally defensive stock.
That's because its earnings are anchored by non-discretionary consumer spending. In other words, regardless of inflation levels or consumer sentiment, Australians still need to eat, which means they need to buy groceries.
Its defensive nature also means Woolworths shares can generate stable cash flow across all phases of the economic cycle. Which means it is able to then pay a steady dividend to its shareholders.
But what would it entail to earn as much as $10,000 per year in passive income from Woolworths shares?
Let's take a look.
Image source: Getty Images
What passive income does Woolworths pay its shareholders?
First, we need to understand what dividends the supermarket giant pays its shareholders.
Woolworths typically pays its investors twice-yearly dividends: an interim dividend in April and a final dividend in October.
This morning, the company announced a final dividend payout of 52 cents per security, fully franked, as part of its FY26 results announcement. Combined with the company's latest 45-cent interim dividend payment in April, that comes to a total FY26 dividend payment of 97 cents per security.
The supermarket giant is then forecast to pay shareholders $1.13 in FY27.
At the time of writing, this translates to a dividend yield of around 2.5% for FY26. For FY27, the forward dividend yield could be roughly 2.9%.
So, how many Woolworths shares do I need to generate $10,000 in passive income in FY27?
Using the FY26 total dividend payment of 97 cents per share, investors would need to own around 10,309 shares in order to earn $10,000 per year in passive income.
Then, assuming the supermarket business pays the forecast $1.13 dividend in FY27, investors would need to buy 8,849 shares to generate the same $10,000 in annual passive income.
How much would that cost?
At the time of writing, Woolworths shares are $38.85 each.
That means, in order to buy the 10,309 shares needed for $10,000 of passive income in FY26, you would need to invest roughly $400,515.
For FY27, you'd need to invest $343,783 to buy the 8,849 shares needed for the same annual passive income.
It's not a small amount, but it could be worth it in the long run.
And remember, you don't need to invest the entire amount in one go. Start off small and let compound growth do some of the work for you.
