Buyers in easyJet (LSE:EZJ) shares have been understandably thrilled earlier this 12 months as dividends lastly returned. After being minimize within the fallout of the 2020 pandemic, it’s been 4 years since shareholders have loved some passive earnings from the short-haul airliner.

And whereas the yield at the moment sits at a tiny 0.85%, it may surge if administration’s in a position to restore shareholder payouts to pre-pandemic ranges.

So what do the dividend forecasts say? Let’s check out the present predictions between now and March 2029.

Restoration might take some time

In March this 12 months, shareholders obtained a dividend of 4.5p per share. That’s definitely higher than zero. Nevertheless it’s not even near the 43.9p obtained in early 2020 earlier than the pandemic got here in like a wreaking ball. If shareholder payouts have been to instantly return to pre-pandemic ranges, at at the moment’s share price, easyJet shares would yield roughly 8.3%.

That definitely sounds attractive. However how practical is that this prospect? Trying on the newest analyst predictions, it appears shareholders will probably have to attend fairly some time.

To cowl the price of most of its dividend, easyJet spent £34m. So to revive the dividend per share again to 43.9p, the corporate might want to generate round £312m in extra earnings. That’s nearly double the £174m paid out within the pre-pandemic period. What’s occurring?

With all of the disruption to the journey sector, easyJet had little selection however to difficulty new shares in a number of rounds of capital elevating. Consequently, the group’s variety of shares excellent has nearly doubled over the past 4 years, from 472 million to 758 million, as of March this 12 months.

With that in thoughts, it’s not stunning to see forecasts wrestle to interrupt previous 10p even 5 years from now.

Ought to I purchase the shares at the moment?

The rebound in passenger volumes throughout the airline business has been a welcome tailwind for firms like easyJet. Costs are beginning to soften as extra opponents bounce again and ramp up operations, boosting provide. However, easyJet’s bundle vacation phase’s seemingly offsetting this adverse influence, on observe to ship £170m of pre-tax income by the top of its 2024 fiscal 12 months.

That definitely bodes properly for administration hitting its £1bn pre-tax revenue goal. And assuming this threshold’s reached, a £312m dividend might be inexpensive. But, wanting on the forecasts, it appears analysts are sceptical.

This lack of enthusiasm might current a shopping for alternative for contrarian traders. Nevertheless it’s not completely unfounded. Increased rates of interest are problematic for a debt-heavy stability sheet, as is gasoline price inflation. Contemplating easyJet’s pricing energy’s fairly restricted, margins are prone to come below strain.

Personally, I believe there are much better earnings alternatives on the market. So I’m not planning on including any easyJet shares to my portfolio at the moment.