10% yield? Here’s the Glencore dividend forecast for 2023 and 2024

Glencore (LSE:GLEN) is one of the heavy hitters of the FTSE 100. It is not only one of the largest in the index by market cap, but also has a record of paying good dividends when profits are high. Since the current dividend yield is 7.17%, I want to check what analysts think the future holds. Here are the current market expectations for Glencore’s dividend.

Take the current year

First, let’s release how Glencore usually pays its shareholders. When the initial full-year results are released each February, the basic dividend amount is confirmed. A variable top-up is added, based on the previous year’s performance. It is paid in two installments (usually split evenly), one paid in May and the other in September.

On top of this, a special top-up dividend can be paid. This could be associated with better than expected finances for the year, or something else such as the sale of a business division. The company can also carry out a share buyback program (which was recently allocated $1.5bn) and other initiatives.

Given now in March, we know that the proposed 2023 dividend is $0.44 per share. This is divided into two installments of $0.22. We don’t know if there will be a special dividend that will be paid later this year, but I wouldn’t count on it. If it does, that’s a bonus!

If I take the current share price of £4.52 (and convert $0.44 to £0.37), I get a dividend yield of 8.18%. It assumes that I buy at this stock price. Since I can’t buy today, the result could be lower or higher based on the stock price movement.

Looking further ahead

Now, the forecast for 2024 is a payment of $0.56, again divided by two. Using the exchange rate calculation, this is £0.46. The dividend yield on the stock is currently 10.17%.

I think part of the reason why dividend forecasts are rising is because of good trading conditions. 2022 is a very good year, with adjusted EBITDA up 60% over last year. Going forward, I think there is enough diversity in the operation to maintain this momentum.

I note the risks associated with China’s reopening. Higher demand from this part of the world will bode well for Glencore. However, I’m not sure it will be an easy road. The power of the government there to close borders and control people could have a negative impact on Glencore this year.

Glencore’s share price has fallen 10% in the past year, but is up 21% over the past five years. It’s a volatile stock to hold, but with generous dividend payments expected, it appeals to me. I will put the company on my watch list to see how it performs in the coming months.