Owning Coles Group Ltd (ASX: COL) shares has been a rewarding pick for investors seeking rising dividend payouts.
It's understandable why the business has managed to deliver such a consistently growing dividend – a supermarket business selling food is a vital service and Australia's population has steadily increased over the years.
FY26 was a prime example of how the business can deliver rising profit and larger dividends.
FY26 total revenue grew 2.8% to $45.6 billion, total underlying operating profit (EBITDA) rose 7.1% to $4.2 billion, underlying EBIT (another form of operating profit) rose 9.9% to $2.3 billion and underlying net profit after tax (NPAT) grew 13.7% to $1.25 billion.
This result allowed the Coles board of directors to hike the annual dividend per Coles share by 13% to 78 cents. Let's take a look at what's expected of the company's dividend for the next few years.
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FY27
We are currently in the 2027 financial year for Coles, with the supermarket business saying that its sales growth in the first eight weeks of FY27 was consistent with the fourth quarter of FY26. Its e-commerce penetration continues to be impressive and a significant driver of growth – this reached 15.7% over the period.
In the other divisions, liquor's sales trajectory strengthened across the first eight weeks compared to the fourth quarter of FY26. Its convenience portfolio continued to deliver positive growth, while performance in the warehouse portfolio also improved.
Coles' CEO Leah Weckert noted that the company has made significant progress over the last three years and it has a "strong plan for the year ahead to keep improving the customer offer, strengthen the business and support sustainable long term growth."
According to the projection on Commsec, the business is projected to hike its annual dividend per Coles share by 7% to 83.5 cents. That's a potential forward grossed-up dividend yield of 5.1%, including franking credits, at the time of writing.
FY28
The business is forecast to increase its annual dividend per share again in the 2027 financial year, which I'm sure is positive news for shareholders.
The projection on Commsec implies a possible year-over-year 6.3% increase of the annual dividend per share to 88.8 cents.
If owners of Coles shares do receive that dividend, it would be a grossed-up dividend yield of 5.4%, including franking credits, at the time of writing.
FY29
The best dividend of all could happen in the last year of this series of projections.
According to the projection on Commsec, the business could hike its FY29 dividend per share by 9.7% to 97.4 cents per share.
If that prediction comes true, then Coles would have a grossed-up dividend yield of 5.9%, including franking credits, at the time of writing.
There are not many ASX blue-chip shares that I think are as likely as Coles to continue hiking the dividend in the coming years, so it's definitely one to look at for passive income investors.
