Owning AGL Energy Ltd (ASX: AGL) shares over the years has delivered plenty of passive income in the form of dividends. Investors may be wondering what the future holds for potential payments.
As one of Australia's largest energy businesses, AGL has an important role to play in terms of both the energy it generates and its role as one of the largest energy retailers.
In terms of its energy retailing, in FY26, it reported that it had total AGL customer services of 4.6 million (up 92,000 year-over-year).
Its energy generation portfolio is currently very diversified across coal-fired power, gas, hydro, wind, solar and batteries.
The company is currently working on transitioning its energy portfolio. It has ambitions to add 12GW of new renewable and firming capacity by the end of 2035, and is looking at options to accelerate that timeline where possible.
Given the required capital expenditure for its new energy investments, let's look at what the upcoming dividends could be.
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FY27
In the 2026 financial year, the company generated underlying net profit after tax (NPAT) of $631 million (down 2%) and declared an annual dividend per share of 50 cents.
AGL said that it's targeting a dividend payout ratio range of between 55% to 60% of underlying net profit for the FY27 dividend and it's expected to be fully franked.
According to the projection on Commsec, AGL is forecast to see a slightly lower annual dividend of 49 cents per share, which would represent a decline of 2% compared to FY26. That would be a dividend yield of 5.8% excluding franking credits and 8.3%, including franking credits.
FY28
The company's financials could see a decline of earnings in the 2028 financial year, which could then see a flow-on effect to the dividend. Earnings per share (EPS) could decline by 20% in FY28, which is a sizeable drop.
According to the projection on Commsec, AGL's dividend will fall by another 26% to 36.4 cents per share. At the time of writing, that translates into a dividend yield of 4.3% excluding franking credits and 6.2% including franking credits.
FY29
In the final year of this series of projections, AGL's earnings dividend could start climbing again, according to the forecast.
AGL's EPS could climb by 22.8% in the 2029 financial year, which could help the dividend rise by 15% to 41.9 cents per share.
That estimate says that the AGL dividend yield could be 5% excluding franking credits and 7.1% including franking credits.
If these projections happen, it shows that the AGL dividend yield could remain solid, even if the payout does reduce in FY28.
