The Telstra Group Ltd (ASX: TLS) dividend and the FY25 result have just been announced to the market. Investors can be pleased with the inflation-beating increase in the passive income.
Profit growth is essential to sustainably fund higher payouts, so let's remind ourselves what the numbers said.
The telco reported that its underlying operating profit (EBITDA) increased 4.6% to $8.6 billion, underlying net profit for shareholders grew 2.6% to $2.2 billion, underlying earnings per share (EPS) rose 3.2% to 19.1 cents, and cash EPS grew 12% to 22.4 cents.
With those numbers, Telstra's board of directors were encouraged to declare a larger dividend for investors.
Telstra dividend
The ASX telco share decided to increase its FY25 final dividend by 5.6% to 9.5 cents per share.
Added to the interim dividend of 9.5 cents per share, the company's full-year dividend is 19 cents per share. That represents a 5.6% year-over-year growth.
On top of that, the company announced it's going to launch a $1 billion share buyback.
In terms of the dividend payout ratio, Telstra said that its dividends represent 99% of underlying EPS, 85% of cash EPS, and 101% of reported EPS.
While the dividend is slightly higher than reported EPS, it is a significant improvement from the dividend payout ratio of 128% of reported EPS in FY24.
When will this be paid?
The ASX telco share announced that the ex-dividend date for the upcoming payment is 27 August 2025, which is less than two weeks away. That means if investors want to gain entitlement to the Telstra dividend, they need to buy shares by the end of trading on Tuesday, 26 August 2025.
Telstra will send the cash to investors on 25 September 2025.
The company's dividend reinvestment plan (DRP) will be active for this dividend, allowing investors to receive new Telstra shares rather than cash.
If investors want to take part in the DRP, they need to elect to do so by 5pm on 29 August 2025.
What's the Telstra dividend yield?
At the current Telstra share price, the FY25 final dividend translates into a fully franked dividend yield of approximately 2% and a grossed-up dividend yield of 2.8%, including franking credits.
The full-year dividend payout of 19 cents per share equates to a fully franked dividend yield of 3.9% and a grossed-up dividend yield of 5.6%, including franking credits.
