Is the Woodside share price a buy following its dividend policy change?

The Woodside Energy Group Ltd (ASX: WDS) share price has seen its fair share of volatility this year. After dropping 8% in November to date, at the time of writing it's a good time to ask if the ASX energy share is a buy.

As the above chart shows, the business is lower than it has been for months, so brave investors may be wondering what experts think of the company after its recent capital markets update.

Let's look at a couple of highlights of what Woodside said on 5 November 2026.

Dividend changes and job losses

Woodside outlined a clear plan to further improve its operational and project execution, as well as maximising value from its global LNG-led portfolio.

It noted that it's targeting a portfolio return on average capital employed of between 12% to 15% by the mid-2030s.

In terms of the dividend, Woodside announced a new distribution policy of between 20% to 40% of adjusted operating cash flows. The company said it will prioritise 20% of adjusted operating cash flow as a base dividend, with up to another 20% available for additional dividends and/or share buybacks.

It also announced a new capital framework that where growth spending must compete for capital against additional amounts for distributions.

This new dividend payout ratio creates scope for dividends to increase and, therefore, for the dividend yield to rise, depending on how large the dividends are that it declares. The FY26 first half dividend (announced in August) was based on 80% of net profit, coming to US$1.1 billion. But, with this new ratio, the dividend could have been between US$600 million to US$1.2 billion. But, that would require Woodside to pay towards the top of its range to deliver a big dividend.

However, Woodside also said that it's looking to cut costs and be more efficient by reducing its global workforce by at least 500. This is part of its target to remove US$400 million of costs, including US$100 million of "portfolio optimisation", US$130 million of streamlined processes and a US$170 million reduction on external spending.

Shareholders would normally like a reduction in costs and potentially higher dividends. What do experts think of the ASX energy share now?

Is the Woodside share price attractive?

According to CMC Invest, there have been 11 analyst ratings within the last three months. Of those 11 brokers, three were a buy rating and eight were a hold rating.

A price target is where analysts think the share price will be in 12 months from the time of the investment call.

The average price target of those 11 analysts is A$32.89, implying a possible rise of more than 7% over the next year.

Therefore, brokers are suggesting the business could be a little undervalued now, but it's not a screaming bargain, so I think it could be a smart idea to look at other opportunities. I don't think it's a buy based on a dividend change; I'd buy when energy prices significantly fall because energy prices can be cyclical (and therefore it's good to 'buy low').

The post Is the Woodside share price a buy following its dividend policy change? appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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