As a dividend investor, Lloyds Bank (LON: LLOY) (LLOY.L) is a stock I’m watching with interest right now. Lloyds reinstated its dividend in 2014, and has raised it quite significantly since then, paying two special dividends as well. City analysts expect the dividend growth to continue this year, with a dividend payout of 3.98p currently expected for FY2017. But what about next year? Let’s take a look at the FY2018 dividend forecast for Lloyds Bank.
Big dividend coming in 2018?
At present, according to data from Stockopedia, the consensus figure for Lloyds FY2018 dividend payout is 4.49p.
Data: Stockopedia, Chart: Dividend Wealth
Now, there’s two things to bear in mind with that number. First, that figure is an average of the estimates provided by all the analysts who cover Lloyds. Some analysts will have a lower dividend forecast for Lloyds, and some will have a higher estimate.
Second, it’s important to remember that the figure is simply an estimate. There’s absolutely no guarantee that Lloyds will pay that level of dividend. For example, if profitability was to decline due to a deterioration in UK economic conditions, Lloyds may not be able to afford that level of dividend payout.
However, if Lloyds IS able to deliver on those estimates, investors buying the stock today would receive a dividend yield of a spectacular 6.7% next year. With that kind of dividend yield potentially in the pipeline, it’s little wonder there is considerable interest in Lloyds Bank right now.
Lloyds reports Q3 results next Wednesday, so look out for more details on profitability and any statements regarding the dividend.
Disclosure: Edward Sheldon, CFA has no position in Lloyds Banking Group.
This article is provided for general information only and is not intended to be investment advice. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.