Over the past 12 months Telstra Group Ltd (ASX: TLS) shares have gained 27.9% and paid out some welcome passive income.
In early afternoon trade today, shares in the S&P/ASX 200 Index (ASX: XJO) telco provider are up 1.4%, changing hands for $4.97 apiece. A year ago, you could have picked up those shares for $3.87 each.
As for that passive income, Telstra paid a fully franked interim dividend of 9.5 cents per share on 28 March. And the telco paid out another 9.5 cents per share final dividend on 25 September.
That brings the full year Telstra dividend payout to 19 cents per share.
At the current Telstra share price, the ASX 200 stock trades on fully franked trailing dividend yield of 3.8%.
Which brings us back to our headline question?
Should you buy Telstra shares for their passive income?
Bell Potter Securities' Christopher Watt recently ran his slide rule across the ASX 200 telco (courtesy of The Bull).
"The telecommunications giant delivered moderate growth in full year 2025, in our view," Watt said. "However, mobile pricing pressure remains."
While Watt gave a nod to the appealing passive income on offer, he's not ready to pull the trigger on Telstra shares just yet, citing concerns over further medium-term share price growth.
"The company's dividend yield adds appeal, yet growth is constrained by regulatory uncertainty and a saturated domestic market," he said.
Watt concluded, "TLS offers defensive characteristics, but upside is limited until the infrastructure strategy materialises. We retain a hold recommendation on the stock."
What's the latest from the ASX 200 telco?
As Watt mentioned above, Telstra shares managed to deliver some moderate growth in FY 2025.
The telco's full year passive income payout of 19 cents per share, for example, was up 5.6% from the18 cents per share paid out in FY 2024.
In other core financial metrics, Telstra announced a 14% increase in reported earnings before interest, taxes, depreciation and amortisation (EBITDA) to $8.6 billion. Underlying EBITDA was up a more modest 4.6%.
Telstra also announced a 31% increase in reported net profit after tax (NPAT) to $2.3 billion, with underlying NPAT up 1.8%.
Telstra CEO Vicki Brady noted on the day:
Our reported growth this year is stronger than underlying growth because of significant one-off net costs totalling $715 million in the prior year, mostly related to impairments and restructuring associated with the reset of our Telstra Enterprise business.
The company also announced a new FY 2026 on-market share buy-back of up to $1 billion.
Amid high expectations, Telstra shares closed down 2.6% on the day the company reported.
