When will the Telstra (ASX:TLS) dividend increase again?

Will this telco giant ever increase its dividend again?

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The Telstra Corporation Ltd (ASX: TLS) dividend has traditionally been one of the most popular options for income investors on the S&P/ASX 200 Index (ASX: XJO).

However, over the last few years, shareholders have watched on as the telco giant has been forced to make cut after cut to its dividend.

In fact, the last time the company increased its dividend was in FY 2015. Since then, the Telstra dividend has almost halved from 31 cents per share to 16 cents per share.

When will the Telstra dividend increase again?

The good news for income investors is that the worst appears to be finally over for the Telstra dividend.

So much so, some analysts believe that a dividend increase could be coming in the coming years.

For example, analysts at Goldman Sachs are confident the dividend cuts are old news now. The broker is forecasting a fully franked 16 cents per share dividend each year through to FY 2023. After which, the broker believes Telstra will finally be in a position to make its first dividend increase in almost a decade.

According to a recent note, Goldman expects the telco giant to increase its dividend by 5.4% in FY 2024 to 18 cents per share.

Based on the current Telstra share price of $3.80, this will mean dividend yields of 4.2% through to FY 2023 and then 4.7% in FY 2024. Goldman hasn’t forecast beyond this.

Is the Telstra share price in the buy zone?

Goldman Sachs still sees value in the Telstra share price despite its impressive 26% gain in 2021.

The broker currently has a buy rating and $4.20 price target on its shares. This implies potential upside of 10.5% over the next 12 months.

And if you include the forecast Telstra dividend, this will increase the potential return to just under 15%.

Should you invest $1,000 in Telstra right now?

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Motley Fool contributor James Mickleboro 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 owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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