Qantas Airways Limited (ASX: QAN) shares were on form last week.
The airline operator's shares ended the week almost 7% higher than where they started them.
Investors were buying the company's shares following the release of a strong full year result.
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Qantas results reminder
In case you missed it, Qantas reported a 10.7% increase in revenue to $21.9 billion for the 12 months ended 30 June.
And while the Flying Kangaroo posted a 16% decline in underlying profit before tax to $2.08 billion, this was in line with the consensus estimate for FY 2024.
The key performers during the year were its Jetstar Group and Qantas Loyalty businesses. Jetstar Group posted a 23% increase in underlying EBIT to $497 million, whereas the ever-reliable Qantas Loyalty business achieved a 13% lift in underlying EBIT to $511 million. This was offset by profit declines from the Qantas Domestic and Qantas International businesses.
While no Qantas dividend was announced with these results, management did announce a new $400 million on-market share buy-back. It also suggested that dividends could return after a five-year hiatus in FY 2025.
In light of this, let's take a look at what analysts are predicting for Qantas' payouts in the coming years.
Qantas dividend forecast
According to a note out of Goldman Sachs, its analysts are forecasting a 30 cents per share dividend from Qantas in FY 2025.
Based on the current Qantas share price of $6.71, this would mean an attractive 4.5% dividend yield for investors.
Looking at FY 2026, the broker believes the Qantas dividend will remain at 30 cents per share. This will mean another 4.5% dividend yield for income investors to look forward to.
And for a third year in a row, Goldman expects the airline to reward its shareholders with a 30 cents per share dividend in FY 2027. This of course represents another 4.5% dividend yield for anyone buying at current prices.
Should you invest?
As well as attractive dividend yields, Goldman sees potential for market beating gains from Qantas' shares between now and this time next year.
In response to its results, its analysts reiterated their conviction buy rating and $8.05 price target. This implies potential upside of 20% for investors over the next 12 months.
The broker recently commented:
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.
