Woodside Energy Group Ltd (ASX: WDS) shares can be a great source of passive income in the year ahead.
The company is seeing higher earnings due to stronger energy prices, which can lead to larger distributions.
Woodside has operations across the world, with projects in Australia, Africa and North America.
Let's take a look at what the business is projected to deliver in passive income in the coming year.
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2027 financial year projection
The company's payout depends heavily on energy prices, which is why it has fluctuated so much over the years. Production costs usually don't change much in the short term, so a rise in revenue can largely boost net profit too.
But the opposite can also be true. When energy prices and revenue decline, net profit can drop significantly, likely reducing passive income for owners of Woodside shares, too.
The FY26 half-year result showed what the company is capable of when energy prices rise.
Operating revenue grew 13% to US$7.4 billion, underlying net profit after tax (NPAT) rose 7% to US$1.3 billion and free cash flow soared 159% to US$352 million. The financial improvement was helped by a 20% rise in the average realised price to US$74 per barrel of oil equivalent (BOE).
As the company noted, total production volume fell only 13% to 86.5 million barrels of oil equivalent (MMboe), while production costs rose 12% to US$749 million. I think those figures explain why the financials didn't grow even more during the first six months to June 2026.
There was an improvement in net profit, which allowed the company to hike its interim dividend per share by 8% to US 57 cents in its HY26 result. But I'm going to look at the 2027 financial year prediction by analysts.
Based on the projection on CMC Invest, Woodside could pay an annual dividend per share of $1.94, which translates into a potential grossed-up dividend yield of 8.7%, including franking credits, at the time of writing.
What passive income would a $15,000 investment in Woodside shares create?
If an investor wanted to put $15,000 into Woodside shares, they would be able to buy 470 Woodside shares, at the time of writing.
With that investment and the projection for FY27, an investor could receive $911.8 of dividend cash and $1,302.6 of overall dividend income, including the franking credits.
Should investors actually do that? According to CMC Invest, analysts have issued 10 ratings on the business in the last three months: two buys, seven holds, and one sell.
The average price target of those 10 analyst ratings was $32.11, implying little positive movement (at the time of writing) over the next year. Therefore, it appears fully valued and it could be better to look at other ASX share opportunities today.
