One of the most popular options for income investors on the Australian share market is the Telstra Corporation Ltd (ASX: TLS) dividend.
In light of this, readers may be curious where the telco giant's dividend is heading in the coming years. Let's take a look and see what analysts are saying.
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Where is the Telstra dividend heading?
The good news for investors is that the Telstra dividend could be close to increasing for the first time in almost a decade. Though, it may be a little too soon to expect a dividend increase with the company's upcoming full year results.
According to a note out of Goldman Sachs, its analysts are expecting Telstra to declare a fully franked final dividend of 8 cents per share this month. This will bring its full year dividend to a fully franked 16 cents per share, which is in line with what was paid a year earlier.
Based on the current Telstra share price of $4.03, this will mean a yield of approximately 4% for investors.
Next year, in FY 2023, Goldman expects the company to increase its dividend for the first time since 2014 and is forecasting a fully franked dividend of 17 cents per share. This represents a 4.2% dividend yield for any income investors buying shares at today's price.
Pleasingly, the trend is expected to continue in FY 2024, with Goldman forecasting another increase in the Telstra dividend to 18 cents per share. This will mean a fully franked yield of approximately 4.5% for investors.
Is the Telstra share price good value?
Although Goldman Sachs sees value in the Telstra share price at the current level, it isn't enough for a buy recommendation.
The broker currently has a neutral rating and $4.40 price target on the company's shares. This implies a potential return of 9.1% over the next 12 months before dividends and over 13% including them.
