How much must I invest in Westpac shares to earn $2,000 of dividend income?

Résumé détaillé

Can Westpac be a good source of dividends? The post How much must I invest in Westpac shares to earn $2,000 of dividend income? appeared first on The Motley Fool Australia.

Owning Westpac Banking Corp (ASX: WBC) shares is typically a good source of dividend income each year.

The bank regularly likes to give investors a sizeable portion of its profit each year, creating a solid dividend yield.

For example, in the 2026 financial year for the 12 months to 30 September 2026, the ASX bank share decided on a dividend payout ratio of 77% of statutory net profit and 75% of net profit excluding notable items. That keeps around a quarter of the net profit within the business to help future growth.

With a payout ratio in the 70% range, I think it can continue to sustainably fund dividend payouts at the current level.

In the FY26 result, released on 2 November 2026, Westpac reported earnings per share (EPS) of $1.99. That means it's currently trading on a price/earnings (P/E) ratio of 19x FY26's earnings.

Now that shareholders have seen the FY26 result, they've also learned what the FY26 annual dividend is.

With Westpac's cash net profit generation flat compared to FY25, at $7 billion, the dividend was largely held. The final dividend was maintained at 77 cents per share and the annual dividend per share was hiked by 1% to $1.54.

At the time of writing, the FY26 annual dividend translates into a dividend yield of 4.1% excluding franking credits and 5.9% including franking credits.

The ASX bank share is forecast to deliver investors a slight rise in the annual dividend per share in the 2027 financial year to $1.55, according to the projection on Commsec.

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