Owners of Telstra Group Ltd (ASX: TLS) shares regularly get a good dividend. In this article, we're going to look at how much passive income we could get by investing $15,000 at the current Telstra share price.
Most readers may already know that Telstra is the largest telecommunications business in Australia, with what's seen as a strong market position in the 5G space.
The business has been paying passive dividend income for decades and recently started increasing the payments again to shareholders.
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How large will the next dividend be?
In FY23 the business paid an annual total of 17 cents per share to shareholders. That represented a fully franked dividend yield of 4.4% or a grossed-up dividend yield of 6.25%
However, those dividend payments are in the past and not necessarily representative of what the next 12 months of dividends will be.
Telstra's board of directors are the ones that decide what the size of the dividend payments will be. But, analysts can make a projection about what they think the upcoming dividend will be.
On Commsec, the current projection is that owners of Telstra shares will receive an annual dividend of 18 cents per share. That translates into a fully franked dividend yield of 4.6% and a grossed-up dividend yield of 6.6%.
How much passive income would a $15,000 investment in Telstra shares generate?
If we assume that Telstra will indeed pay 18 cents per share, in FY24, then investors could get a cash dividend of $690, and including franking credits it could result in grossed-up dividend income of approximately $986.
With a $15,000 investment, it could generate almost $1,000 of passive dividend income.
But, there's more to the potential income than just what happens in the next 12 months.
Estimates on Commsec suggest that profit could grow in FY25 and the dividend could increase again to 19 cents per share.
With that projection in mind, a $15,000 investment today might pay $735 of cash dividends and $1,050 of grossed-up dividend income in FY25.
Can the ASX telco share keep growing profit?
A number of factors could mean that Telstra is able to grow its profit in at least two or three of the next financial years.
Telstra is growing its number of subscribers, it's increasing prices for mobile and broadband subscribers, it's experiencing the return of roaming revenue from visitors to Australia, it's aiming to reduce costs and it's diversifying its earnings geographically (into Asia) and in different sectors (such as healthcare and perhaps cybersecurity).
If profit keeps growing, then the business could continue to increase its annual dividend income.
