Telstra Group Ltd (ASX: TLS) shares are outperforming the broader market on Friday, up 1.93% to $4.22 per share.
Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is up 0.045%.
But this isn't the only reason why Telstra shares investors are happy today.
It's also payday!
The ASX 200 telco will pay its fully franked 1H FY25 interim dividend of 9.5 cents per share today.
This is 5.6% higher than last year's interim dividend.
Investors participating in Telstra's dividend reinvestment plan (DRP) will also receive their new shares today.
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It's payday for Telstra shares investors!
Shareholders can elect to receive their dividends as additional shares instead of a cash payment using the DRP plan.
Investors can fill in a form to give Telstra the authority to use their dividends to buy more shares on their behalf.
With each round of dividends, every company running a DRP needs to determine a DRP share price for the next lot of dividends.
Each company has a unique process for calculating the DRP share price.
As we've reported, Telstra has announced a DRP share price of $4.193 for the interim dividend.
The company determined this price by taking the arithmetic average of the daily volume-weighted average price for Telstra shares traded from 3 March to 7 March.
Telstra's 1H FY25 report
In its 1H FY25 report, Telstra revealed a 6% increase in underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $4.25 billion for the six months ending 31 December.
This was accompanied by a 7.1% lift in net profit after tax (NPAT) to $1.1 billion.
The telco revealed a 0.9% lift in total income to $11.82 billion and a 1.8% reduction in operating expenses to $7.56 billion.
Due to this strong performance, Telstra not only bumped up its interim dividend but also announced a buyback of up to $750 million.
Telstra CEO, Vicki Brady, said:
These are a strong set of results, delivering a fourth consecutive year of first half underlying growth, reflecting momentum across our business, strong cost control and disciplined capital management.
Both the increased interim dividend and the buy-back demonstrate Board and management confidence in our financial strength and outlook.
Are Telstra shares a buy?
The consensus rating on Telstra among analysts on the CommSec trading platform is a moderate buy.
Of the 16 analysts rating the telco stock, eight rate Telstra a strong buy and three rate it a moderate buy.
Four analysts have given Telstra shares a hold rating, and one analyst believes the stock is a strong sell.
Goldman Sachs has a buy rating on Telstra with a 12-month share price target of $4.50.
In terms of dividends, the broker is forecasting fully franked dividends of 19 cents per share in FY25 and 20 cents per share in FY26.
