How big will the Coles dividend be in 2024?

Will this supermarket giant pay a big dividend next year?

| More on:
Woman customer and grocery shopping cart in supermarket store, retail outlet or mall shop. Female shopper pushing trolley in shelf aisle to buy discount groceries, sale goods and brand offers.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Coles Group Ltd (ASX: COL) shares have been a popular option for income investors since their spinoff from Wesfarmers Ltd (ASX: WES).

In fact, much to the delight of its shareholders, it was one of only a handful of ASX shares that continued to pay dividends as normal during the pandemic.

This is exactly what you want when you're looking for a regular source of income from the share market.

With that in mind, what should investors expect from the supermarket giant in 2024?

How big will the Coles dividend be in 2024?

As a reminder, Coles paid investors a fully franked 66 cents per share dividend in FY 2023.

Unfortunately, the team at Citi appears to believe that softer profits are coming in FY 2024, which it expects to lead to a modest dividend cut.

The broker has pencilled in a fully franked 64 cents dividend for the financial year. Based on the Coles share price of $16.09, this equates to a 4% dividend yield.

And while a dividend cut might be disappointing, Citi doesn't think it should put you off investing in Coles shares today. In fact, it sees plenty of upside for investors that buy in at current levels.

According to a recent note, the broker has a buy rating and a $17.50 price target on its shares. This implies a potential upside of approximately 9% for investors over the next 12 months. And if we throw in the 4% dividend yield, it stretches the total potential annual return to an attractive 13%.

It is also worth noting that Citi believes that Coles' dividend will return to growth the year after. It has pencilled in 70 cents per share in FY 2025 and then 79 cents per share in FY 2026. This represents yields of 4.4% and 4.9%, respectively, for investors.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Buy Rio Tinto and this ASX 200 dividend stock

Analysts have named these stocks as buys for income investors. Let's dig deeper into things.

Read more »

Excited woman holding out $100 notes, symbolising dividends.
Dividend Investing

These ASX dividend shares could offer 8%+ yields

Income investors might want to check out these high-yield stocks that analysts have named as buys.

Read more »

Two excited woman pointing out a bargain opportunity on a laptop.
Dividend Investing

2 no-brainer ASX dividend shares I'd buy right now for less than $1.20

These stocks are real (estate) opportunities, in my eyes.

Read more »

Woman holding $50 notes with a delighted face.
Dividend Investing

Investors who bought this ASX 200 dividend stock at the start of 2019 have already received almost 3 times their cash back in dividends

This stock has been an incredible dividend payer.

Read more »

A businessman hugs his computer and smiles.
Dividend Investing

3 buy-rated ASX dividend stocks that analysts love

Let's see what analysts are predicting from these income options.

Read more »

Dividend Investing

2 unstoppable ASX dividend shares to buy if there's a stock market sell-off

Analysts rate these top stocks as buys. Here's why they could be even more attractive if the market crashes.

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Dividend Investing

Buy these high-yield ASX 200 dividend stocks in 2025

Which dividend stocks are getting the thumbs up from analysts right now? Let's find out.

Read more »

Smiling woman with her head and arm on a desk holding $100 notes out, symbolising dividends.
Dividend Investing

Analysts name 3 ASX dividend shares to buy in January

These shares have been tipped as buys for income investors.

Read more »