Can Woodside shares deliver an attractive dividend yield AND 16% upside in 2022?


The Woodside Energy Group Ltd (ASX: WDS) share price could have a bright future, according to brokers.

The dividend-paying energy stock has reportedly been tipped to gain more than 16% by a top broker.

At Friday’s close, the Woodside share price was $31.92, down 0.87% on the day.

For context, the S&P/ASX 200 Index (ASX: XJO) also finished in the red on Friday, sliding 1.76%. Meanwhile, the S&P/ASX 200 Energy Index (ASX: XEJ) was down 1.59%.

Let’s take a closer look at what the future might bring for the ASX 200 energy giant.

Could Woodside offer a 16% upside and 2.35% yield?

The Woodside share price could reach $37 in the relatively near future, a top broker has reportedly tipped.

The bullish prediction was tabled by JPMorgan, according to The Australian.

Excitingly, that would still leave the stock boasting a respectable dividend yield of 2.35%.

That takes into account the company’s previous two dividend payments — a 41.03 cent interim dividend paid in September and a $1.46 final dividend handed out in March.

However, Morgan Stanley is expecting the stock to trade with a dividend yield of 10% to 12% over the coming years following the company’s merger with BHP Group Ltd (ASX: BHP)’s petroleum assets. Though, it noted that prospect is reliant on energy prices remaining strong.

In fact, the broker reportedly expects Woodside to pay out US$20 billion of dividends over the coming decade.

Perhaps unsurprisingly, Morgan Stanley is said to be more bullish on Woodside, slapping it with a $40 price target.

Wilson Asset Management (WAM) also likes the newly merged company.

As my colleague Tristan Harrison recently reported, the fund believes that by merging Woodside and BHP’s petroleum business the former’s balance sheet has been “de-geared”, allowing it to push forward with major projects.

Friday’s dip wasn’t enough to dint the Woodside share price’s impressive year-to-date performance.

Right now, the stock is trading for 40% more than it was at the start of 2022. It’s also 37% higher than it was this time last year.

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