Income investors looking at Telstra Group Ltd (ASX: TLS) shares today might be a little surprised to see this S&P/ASX 200 Index (ASX: XJO) telco's dividend. Telstra has long been an ASX income stock famous for its fat dividend yield. However, the Telstra dividend that's on offer today looks a little different to what investors might have become used to over recent years.
Ever since its ASX listing back in the 1990s, Telstra shares have been a favourite of ASX income investors. The telco has funded massive, and fully-franked, dividends for decades. Thanks to a seemingly impenetrable dominance of the Australian telecommunications industry – both in mobile and fixed-line services – this company has long enjoyed wide profit margins, enabled by a wide economic moat. This, in turn, has enabled a stream of relatively dependable dividends.
But looking at Telstra shares today, two things might stand out to long-time watchers of this income stock when it comes to the Telstra dividend.
Image source: Getty Images
Where's the rest of it?
Firstly, it's not very high, at least by Telstra's standards. At the time of writing, Telstra is trading at $5.22 a share. At this price, the company sports a trailing dividend yield of 3.84%. That might seem decent, but keep in mind that, as recently as 15 months ago, Telstra shares were trading with a dividend yield over 4.5%.
That's not exactly Telstra's fault. The telco increased its annual dividends in 2025, and again with its interim dividend just last month. In fact, Telstra has delivered an annual dividend rise every year since 2021.
We can blame this reduction in dividend yield on Telstra's galloping share price.
Telstra shares have been on fire over the past couple of years. It was only in mid 2024 that the company was trading at under $3.50 a share. Last month, the company hit a multi-year high of $5.26 a share. Between May 2024 and today, Telstra stock has jumped an impressive 51% or so.
That has been great for existing investors, but it has also had the deleterious effect of lowering the company's dividend yield.
Telstra dividend: Fully franked no more?
The other thing that might stand out with the Telstra dividend today is its franking, or lack thereof.
Before 2026, Telstra was well-known for its habit of always attaching full franking credits to its dividends, much to the delight of income investors. However, that trend came to an end last month when the telco revealed its latest interim dividend. While there was much to like in Telstra's 10.5% dividend increase to 10.5 cents per share, Telstra surprised the market by announcing that this payout would only come partially franked at 90.5%. It was the company's first non-fully franked dividend in almost three decades.
As we dove into at the time, Telstra didn't really tell us why it had changed the franking status of this latest payout. It will be interesting to see if the company's final dividend later this year comes partially franked too.
