Here's how much I'd need to invest in Westpac shares for $3,000 a year in passive income

Is this banking giant a good option for income investors?

| More on:
Person handing out $50 notes, symbolising ex-dividend date.

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

Westpac Banking Corp (ASX: WBC) shares are a popular option for income investors.

This is because Australia's oldest bank is among the biggest dividend payers on the Australian share market.

For example, in FY 2023, the bank returned a total of $5 billion to shareholders in the form of dividends.

This was through the payout of fully franked dividends of 142 cents per share. Which, based on the current Westpac share price of $23.10, represents a generous 6.15% dividend yield.

Passive income from Westpac shares

Clearly, with a yield like that, Westpac shares are a great source of passive income. But how much would you need to invest if you wanted to receive $3,000 in dividends each year? Let's have a look and find out.

According to a recent note out of Ord Minnett, its analysts are forecasting fully franked dividends of $1.45 per share in FY 2024.

If this estimate proves accurate, you would need to own approximately 2,069 Westpac shares in order to receive $3,000 in passive income. This would mean an investment of $47,793.90 into the big four bank's stock.

But it could be worth it if Ord Minnett is on the money with its recommendation. The broker has an accumulate rating and a $28 price target on its shares.

If your shares were to rise to this level, they would have a market value of $57,932. That's over $10,000 greater than your original investment and excludes the $3,000 of passive income.

All in all, the broker appears to see Westpac as a great option if you're currently lacking any meaningful banking sector exposure in your portfolio today.

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Bank Shares

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Bank Shares

$10,000 invested in NAB shares 5 years ago is now worth…

NAB shares have delivered some benchmark smashing returns over the past five years.

Read more »

A man casually dressed looks to the side in a pensive, thoughtful manner with one hand under his chin, holding a mobile phone in his hand while thinking about something.
Bank Shares

Will CBA shares continue to outperform BHP shares over the next 5 years?

Which of these two giants will perform best? Let's find out.

Read more »

Bank building with the word bank in gold.
Bank Shares

What price targets does Macquarie have on the big 4 banks?

Here's what the broker has to say about the big 4 bank share prices.

Read more »

A man holds his hand under his chin as he concentrates on his laptop screen and reads about the ANZ share price
Bank Shares

Should I buy ANZ shares today?

With a 5.7% dividend yield, are ANZ shares a good buy right now?

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
Bank Shares

Can Bank of Queensland shares keep outperforming the other ASX 200 bank stocks into 2026?

A leading expert offers his verdict on what’s ahead for Bank of Queensland shares.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

Forget CBA shares, Ord Minnett says this ASX bank stock could rocket 50%+

Let's see which bank stock could be a better buy.

Read more »

ASX 200 shares broker downgrade origami paper fortune teller with buy hold sell and dollar sign options
Broker Notes

Are Bendigo Bank shares a buy, hold or sell? Here's Macquarie's latest recommendation

Should I buy the dip on Bendigo Bank shares today?

Read more »

A man thinks very carefully about his money and investments.
Bank Shares

Why these experts say sell CBA shares now

These two investment experts recommend selling CBA shares today. But why?

Read more »