Thanks to exceptionally strong coal prices, Whitehaven Coal Ltd (ASX: WHC) shares have been tipped to pay some big dividends in the near term,
But how big will the Whitehaven Coal dividend be? Let's take a look at what Goldman Sachs is expecting from the coal miner through to FY 2024.
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Where is the Whitehaven Coal dividend heading?
Firstly, let's start with the Whitehaven Coal dividend in FY 2021. Well, actually we can't, because there wasn't one.
Due to the company posting a net loss after tax before significant items of $87.3 million, the board determined that a dividend would not be paid.
But what a difference a year makes. Thanks to sky high coal prices, Goldman Sachs is expecting the company to pay a dividend of 47 cents per share in FY 2022. Based on the current Whitehaven Coal share price of $6.04, this will mean a dividend yield of 7.8% for investors.
Though, it is worth noting that this is below the consensus estimate of 63 cents per share, which would mean an even more attractive yield of 10.4%.
What's next?
The good news is that the Whitehaven Coal dividend is expected to increase again in FY 2023. Goldman is forecasting dividends per share of 84 cents and the consensus estimate is for 120 cents.
This would mean yields of 13.9% or 20%, respectively, for investors in FY 2023.
After which, both Goldman and the market are expecting the company's dividend to ease back to 67 cents per share and 60 cents per share, respectively, in FY 2024. This will mean yields of 11.1% or 9.9% for that financial year.
Goldman's forecasts are based on the thermal coal price averaging US$293 per tonne in FY 2022, US$200 per tonne in FY 2023, and US$120 per tonne in FY 2024.
Is the Whitehaven Coal share price good value?
As well as forecasting bumper dividends, the broker sees plenty of value in the Whitehaven Coal share price.
This morning Goldman Sachs has reiterated its buy rating with a trimmed price target of $6.80. This implies potential upside of almost 13% for investors over the next 12 months.
