Owning Wesfarmers Ltd (ASX: WES) shares normally means getting a pleasing dividend each year. The owner of Kmart, Officeworks, Bunnings, and Priceline has a goal of rewarding shareholders with some of its cash flow every year.

Every company has to balance its desire to reward shareholders through dividends with its need to retain enough money to ensure a resilient balance sheet and enable investing for growth.

I think Wesfarmers has been doing a good job at balancing growth and dividends to date.

But what could happen to the company's payout in the next few years? Well, broker UBS has some projections.

Ultimately, it's up to the board of directors to decide on the level of payments. Still, analysts can make projections based on what a company's leadership has said and how their profit is projected to perform. So, let's look at what's expected.

First, FY25

The latest forecasts from UBS about Wesfarmers shares came after the company announced its FY25 half-year result.

The broker thought Bunnings' revenue was resilient, with growth in both consumer and commercial divisions. Operating profit margins were steady, thanks to cost discipline and productivity initiatives through technology, rostering, and the supply chain.

UBS suggests that Bunnings "enjoys underappreciated growth potential" by expanding in existing product categories and entering new categories. Kmart has benefited from customers 'trading down' during this period of economic challenges, with customer numbers, units sold, and transaction volumes all growing, leading to market share growth. The broker also said Kmart Group is benefiting from productivity initiatives, expanding the Anko range in Target, and integrating Kmart and Target's systems and processes.

UBS is projecting that Wesfarmers could grow its annual dividend per share to $2.05 in FY25. At the current Wesfarmers share price, that translates into a grossed-up dividend yield of close to 4%, including franking credits.

Next, FY26

The broker was pleased with what Wesfarmers reported and decided to increase its long-term earnings projections for Wesfarmers' retail divisions, partly thanks to increasing confidence in Kmart.

The broker is forecasting the annual dividend per share could rise by 11.7% to $2.29 in FY26, following a projection of 8.9% growth for earnings per share (EPS).

Then, FY27

Further growth could occur in the 2027 financial year. Wesfarmers is projected to grow its annual dividend payout by another 11.3% to $2.55 per share. This could happen alongside a possible 11.6% rise in EPS.

After that, FY28

Wesfarmers could then fund another sizeable increase in the dividend per share to $2.79 in the 2028 financial year, a 9.4% year-over-year rise. UBS forecasts this could be achieved after a 9% rise in EPS in FY28.

Finally, FY29

The final projection in this series of forecasts is an annual dividend of $2.98 per share for the 2029 financial year. This would equate to a year-over-year rise of 6.8%, and the grossed-up dividend yield would be 5.7% at the current Wesfarmers share price.

The Wesfarmers payout growth could be funded by a possible 6.7% increase in EPS.