Those who own shares in S&P/ASX 200 Index (ASX: XJO) supermarket operator Coles Group Ltd (ASX: COL) could be in for a good few years, with one top broker tipping the company to pay out 23% more dividends in financial year 2023 than it did in financial year 2021.
The broker is also feeling hopeful about the stock's final dividend of financial year 2022, to be announced later this month.
The Coles share price is currently $18.81, 0.53% higher than its previous close.
For context, the ASX 200 is trading slightly lower today, falling 0.24%.
Let's take a closer look at why Citi is bullish on Coles and its dividends.
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Could Coles shares pay 75 cents of dividend in FY23?
Coles emerged as an ASX dividend share in 2018 shortly after the company was spun-out from Wesfarmers Ltd (ASX: WES). Here's how its fully fully-franked dividends have grown over the years:
- Financial year 2019 saw Coles offer 35.5 cents per share
- That increased to 57.5 cents per share for financial year 2020
- It was upped once more to reach 61 cents per share for financial year 2021
And it's been tipped to continue growing its dividends into the future, as my Fool colleague James reports.
Citi believes Coles will pay out 65 cents per share for last financial year. Meaning, Coles' next final dividend is expected to come in at 32 cents.
The broker also tips the company to offer shareholders 75 cents per share in financial year 2023 – a whopping 22.95% more than its most recent full year payout.
Whether the broker's expectations are realised will be revealed soon. The supermarket operator is set to release its full-year earnings for financial year 2022 – alongside the details of its next dividend – on 24 August.
The broker has also slapped Coles shares with a $21 price target and a buy rating. That represents a potential 12% upside on its current level.
