It may not be long until the inaugural Pilbara Minerals Ltd (ASX: PLS) dividend is paid to shareholders.
That's because earlier this week, the lithium miner unveiled its capital management framework.
According to the framework, with Pilbara Minerals generating significant free cash flow from its operations, it is planning to pay out 20% to 30% of its free cash flow to shareholders from FY 2023.
Management notes that this leaves it with enough free cash flow to maintain safe and reliable operations, as well as support growth and productivity initiatives.
Image source: Getty Images
The Pilbara Minerals dividend forecast
In light of the announcement of the company's capital management framework, investors may now be wondering what to expect from the Pilbara Minerals dividend in the coming years.
The good news for shareholders, is that the team at Macquarie is expecting some very attractive dividend payments from the company.
According to a note from this week, in FY 2023, the broker is forecasting a dividend of 34 cents per share. Based on the current Pilbara Minerals share price, this will mean a 7.2% dividend yield for investors.
Macquarie is expecting its dividend to remain at 34 cents per share in FY 2024, providing investors with another 7.2% yield.
Whereas in FY 2025, its analysts have forecast an 8.8% increase in its dividend to 37 cents per share. This will mean a 7.8% dividend yield for investors that year based on its current share price.
Should you invest?
As well as forecasting generous dividend yields, Macquarie sees plenty of upside for the Pilbara Minerals share price.
Its analysts currently have an outperform rating and $7.70 price target on the company's shares. This implies potential upside of 63% for investors over the next 12 months.
