One of the most negatively impacted shares on the Australian share market during the pandemic has been Webjet Limited (ASX: WEB).
Prior to the pandemic, the online travel agent was growing at a rapid rate and rewarding its shareholders with seemingly ever-increasing dividend payments.
But all that changed in 2020 when the travel market was turned upside-down by COVID-19.
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What's happened to the Webjet dividend?
After well over a decade of consistently paying dividends, these payments came to an abrupt end during the first half of FY 2020 when the true impacts of the pandemic were felt in the travel sector.
Although Webjet declared a 9 cents per share interim dividend with its half year results, it didn't actually make the payment as planned. Instead, the Webjet board deferred the payment initially by almost a year until April 2021, then again until July 2022, before eventually deciding to finally pay it last month.
At the time, Webjet's Chairman, Roger Sharp, explained why the company was deferring its payment.
He said: "At Webjet we believe there will be a significant opportunity when the COVID-19 pandemic subsides […] Never has "cash is king" been a more appropriate epithet for the times we live in. Webjet deliberately recapitalised early to build a war chest so it can operate productively through the downturn. We have deferred payment of the FY20 interim dividend until 16 April 2021 and, given the ongoing market uncertainty, are not declaring a final dividend for FY20."
When will a dividend be paid again?
Despite Webjet finally paying the long-deferred dividend in December, the market doesn't appear optimistic that this signals the restart of regular dividend payments just yet.
For example, both Citi and Goldman Sachs are expecting there to be no dividend payments in FY 2022 but have wildly different views thereafter.
Goldman sees scope for a dividend in FY 2023 and has pencilled in a payout of 9 cents per share. Its analysts then expect this to increase to 14 cents per share in FY 2024. Whereas Citi is not forecasting a dividend in FY 2023 but has tipped a modest 3 cents per share dividend in FY 2024.
As for recommendations, Goldman has a buy rating and $6.90 price target and Citi has a high risk neutral rating and $6.46 price target.
