Telstra Group Ltd (ASX: TLS) has always been a popular choice for ASX dividend investors seeking significant and steady income. Since its privatisation over the 1990s and 2000s, Telstra shares have rewarded income investors in this regard.
To be fair, there was that 2017 hiccup when, thanks to fundamental changes in its business model courtesy of the NBN rollout, the telco was forced to slash its dividend. But ever since then, Telstra has been delivering a reliable and rising stream of income. After paying a fully franked annual dividend over both 2020 and 2021, Telstra delivered its first dividend hike in many years, paying out 16.5 cents per share.
This subsequently rose to 17 cents per share in 2017, then 18 cents per share in 2024.
The trend has continued into 2025 as well, with Telstra shares yielding an interim dividend worth 9.5 cents per share back in March.
So all is well on the dividend fundamentals when it comes to Telstra.
However, the Telstra share price itself has had a momentous 12 months.
A year ago, the company was going for just $3.89 a share after treading water for a number of years. Yesterday, Telstra closed at $4.95 a share after hitting a multi-year high of $4.99 earlier this month.
Yesterday's closing price puts the telco up an extraordinary 27.25% over the past 12 months. Telstra is also up an even more impressive 43.5% since late May 2024.
This has been wonderful for existing shareholders. But not so much for new investors who would like to lock in a high-yield investment. After all, as any good dividend investor knows, higher share prices equate to lower trailing dividend yields.
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How big is the Telstra dividend at $4.95 a share?
So over the past 12 months, Telstra has paid out two dividends to its shareholders. The first was last year's final dividend worth 9 cents per share. The second, the interim dividend of 9.5 cents per share that we touched on above. As is typical with Telstra, both payments came with full franking credits attached.
At the share price Telstra commanded a year ago, that 18.5 cents per share in dividends would give Telstra a dividend yield of 4.76%.
Alas, at the $4.94 Telstra closed at yesterday, the telco only trades on a trailing dividend yield of 3.74%. Still, that dividend grosses-up to a respectable 5.34% if we include the value of those franking credits.
Remember though, a trailing dividend yield reflects the past, not what you can expect in the future. If Telstra increases its payouts again over the coming 12 months, that yield could grow. Conversely, it could shrink if Telstra ends up cutting its dividends. There's never much certainty on the stock market, even from a mature blue chip like Telstra.
