The Glencore dividend forecast for 2024 and 2025 may disappoint income investors

The Glencore dividend forecast suggests that investors shouldn’t expect much passive income from the stock in the next few years.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Earlier this year, Glencore (LSE: GLEN) shocked investors by announcing a huge cut to its dividend. For 2023, the payout was reduced to just 13 cents per share – down 70% year on year. So, what level of income can investors expect to receive in the years ahead from the blue-chip commodities stock? Let’s take a look at analysts’ dividend forecasts for 2024 and 2025.

Created with Highcharts 11.4.3Glencore Plc PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Why the cut?

Before I highlight the expected payouts, it’s worth providing a bit of context here.

In recent years, Glencore has been able to pay out some whopping dividends thanks to high commodity prices. For 2022, for example, the total payout was 56 cents per share.

Should you invest £1,000 in Lloyds Banking Group right now?

When investing expert Mark Rogers has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets. And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Lloyds Banking Group made the list?

See the 6 stocks

However, recently the company acquired a 77% interest in Canadian miner Teck’s steelmaking coal unit for around $7bn. So, it cut its dividend in an effort to pay down the debt taken on for this deal.

It’s worth noting that large dividend cuts from commodities companies are not unusual. In fact, they’re quite common as payouts are often slashed when commodity prices are low.

Given that dividend payouts can fluctuate heavily, these stocks aren’t ideal for those seeking regular, stable passive income. If one is looking for reliable income, stocks in more stable sectors such as consumer goods, healthcare, and utilities are often a better option.

The latest dividend forecasts

As for the dividend forecasts though, Glencore is currently expected to pay out 15.5 cents per share for 2024 and 20.9 cents for 2025.

At today’s share price of 460p and a GBP/USD exchange rate of 1.27, these estimated payouts equate to yields of 2.7% and 3.6%. So, the yield on the stock today isn’t particularly high.

It’s worth pointing out, however, that analysts’ forecasts can be off the mark at times. Especially in this sector, where commodity prices can swing around wildly. So, the actual dividends could end up being higher than this (or lower).

One other thing worth pointing out here is that these are the payouts that are expected to be declared (not paid) for 2024 and 2025. This company usually pays its final dividend for a year in September of the following year.

Still things to like

Now, just because the dividend isn’t what is used to be doesn’t mean that Glencore shares don’t have appeal. I still think they look interesting as a copper play.

You see, Glencore is one of the world’s largest producers of copper. And in the years ahead, demand for the commodity is likely to be very high due to:

  • The renewable energy transition – copper is essential for wind turbines, solar panels, and power grids.
  • Electric vehicles (EVs) – these use considerably more copper than traditional cars.
  • The data centre buildout – copper is needed for many data centre components including power cables.
  • Defence spending – copper is a key ingredient in a wide range of munitions.

So overall, the outlook for Glencore appears to be attractive.

That said, commodity prices are notoriously unpredictable. There’s always the chance that they could crash in the years ahead. If they did, Glencore’s share price would most likely take a hit.

So risk management is sensible here. This isn’t a stock I’d bet the farm on.

Pound coins for sale — 31 pence?

This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!

Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.

What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?

See the full investment case

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Edward Sheldon has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

We think earning passive income has never been easier

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

More on Dividend Shares

Stack of British pound coins falling on list of share prices
Investing Articles

Why hasn’t its 9.9% yield boosted the Phoenix share price?

Phoenix Group has a dividend close to double digits, but saw a weak share price performance in recent years. Christopher…

Read more »

Silhouette of a bull standing on top of a landscape with the sun setting behind it
Investing Articles

With average 10% yields, these mid-cap FTSE shares could supercharge a passive income portfolio

Some of the best passive income gems can be found on the UK's smaller indexes like the FTSE 250 and…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Down 25% since January, this resilient dividend stock’s catching my eye

Maintaining the UK’s rail, water, and energy infrastructure isn’t the most exciting business. But it has made this a solid…

Read more »

Calendar showing the date of 5th April on desk in a house
Investing Articles

Here’s how a £20k ISA could produce £1,580 of passive income in the next year

A Stocks and Shares ISA stuffed with dividend shares can be a lucrative source of passive income. Christopher Ruane explains…

Read more »

Hand flipping wooden cubes for change wording" Panic " to " Calm".
Dividend Shares

2 ‘safe’ LSE dividend stocks to consider as global markets sell off

As global markets experience high levels of volatility due to economic uncertainty, investors are piling into these ‘safe-haven’ dividend stocks.

Read more »

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper
Investing Articles

2 investment trusts to consider for a Stocks and Shares ISA

These two investment trusts have a different focus -- but our writer sees both as worth considering, one more for…

Read more »

Investing Articles

Deutsche Bank reiterates Buy rating on 9.6% yielding FTSE 250 stock that was “most shorted in UK”

Our writer investigates why a major broker remains optimistic about a FTSE 250 stock that was once the most shorted…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

Dividend investors! Here’s what Warren Buffett says builds wealth in the stock market

Reinvesting dividends at yields of 8% or higher looks like a good way of building wealth. But Warren Buffett has…

Read more »