In the past, Qantas Airways Limited (ASX: QAN) shares have been a good option for income investors.
The airline operator regularly shared a decent portion of its profits with its shareholders each year. This often led to some attractive dividend yields.
However, all that stopped in 2020 when the pandemic reared its ugly head and had Qantas and fellow airlines fighting for survival.
Well, the good news is that not only has Qantas survived, but it is also arguably more profitable than ever now thanks to its post-COVID transformation.
But what we are still yet to see is a dividend from Qantas.
Will that change in the near future? Let's now take a look and see what analysts are forecasting for the Qantas dividend through to 2026.
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Qantas dividend forecast
According to a note out of Goldman Sachs, it believes that it will be a little too soon for dividends in FY 2024.
So, if you're on the lookout for income this year, you will be out of luck. But it certainly could be worth being patient.
That's because the broker is forecasting Qantas to pay a 30 cents per share dividend in FY 2025. Based on the current Qantas share price of $6.11, this will mean a dividend yield of 4.9%.
The good news is that Goldman expects the airline operator to maintain its dividend at 30 cents per share in FY 2026. This will mean another 4.9% dividend yield for investors to look forward to receiving.
But should you buy its shares for more than just its future dividends? Goldman thinks you should.
Big returns
The note reveals that the broker sees major upside potential for Qantas shares from current levels.
Goldman has a buy rating and $8.05 price target on its shares. This implies potential upside of 32% for investors over the next 12 months.
To put that into context, a $10,000 investment would be worth approximately $13,200 this time next year if Goldman is on the money with its recommendation.
The broker commented:
As a key beneficiary of the re-opening of the world post-COVID, we expect the airline's traffic capacity to return to 95% of pre-COVID levels by FY24e, with the airline's earnings capacity (EPS) expected to exceed that of pre-COVID levels by ~52%. We forecast a ~24% FY19-24e cumulative uplift in unit revenues (c. 4.4%pa), and ~50% drop-through of QAN's A$1bn+ structural cost-out program. QAN's current market capitalisation and enterprise value are 10% below and 11% below pre-COVID levels. As such, we believe QAN is not priced for a generic recovery, let alone prospects for improved earnings capacity. We continue to see upside associated with substantially improved MT earnings capacity.
