When generating passive income from ASX shares, a very popular option for investors is Telstra Group Ltd (ASX: TLS) shares.
Every year, Australia's largest telecommunications company shares a decent portion of its profits with its shareholders by paying them dividends.
For example, even while its business was being transformed in FY 2022, the company's solid financial performance allowed its board to declare total dividends 16.5 cents per share, returning $1.9 billion to shareholders.
An additional $1.35 billion was also returned to shareholders via an on-market share buy-back following the sale of a non-controlling interest in its Amplitel towers business for $2.8 billion.
The good news for passive income seekers is that operating conditions are very favourable right now and Telstra's outlook is looking very rosy. This has analysts expecting the telco giant to grow its dividend again in FY 2023. But just how big will Telstra's dividend be?
How much passive income will Telstra shares generate?
For our example, we're going to imagine that we have $10,000 ready to invest into Telstra shares.
Based on its current share price of $4.34, if you were to invest that amount, you will end up owning 2,304 shares.
Moving onto the passive income. A recent note out of Goldman Sachs reveals that its analysts are forecasting fully franked dividends per share of 17 cents in FY 2023, 18 cents in FY 2024, and then 20 cents in FY 2024.
Based on the current Telstra share price, this represents dividend yields of 3.9%, 4.15%, and 4.6%, respectively.
Based on the above, your 2,304 shares would yield passive income of approximately $392 in FY 2023, $415 in FY 2024, and then $461 in FY 2025. Though, it is worth noting that Telstra has already paid its interim dividend this year.
Pleasingly, the returns may not stop there. Goldman Sachs has a buy rating and $4.70 price target on Telstra's shares.
If its shares were to reach that level, your $10,000 investment would be valued at approximately $10,830. And that doesn't include any passive income you would receive in the meantime.
All in all, based on the above, I can understand why Telstra shares are popular with income investors.
