Owning Telstra Group Ltd (ASX: TLS) shares has been a rewarding experience for shareholders over the last few years in terms of dividends.
The ASX telco share has given investors a dividend hike each year in the last few years. Not every ASX blue-chip share has managed to deliver that passive income consistency.
Telstra is the leading telco in Australia with the biggest network, the most subscribers and the leading spectrum assets.
Let's take a look at what's expected with the company's dividends for FY26 and FY27.
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FY26
The 2026 financial year finished a few weeks ago, though we haven't seen the reported numbers for the FY26 result yet. That will be revealed later in August. Telstra expects to deliver its annual result announcement on 13 August 2026.
Telstra has earnings tailwinds that could help it deliver rising profit in the 2026 financial year (and beyond), such as Australia's increasing digitalisation, Telstra's rising mobile prices boosting the average revenue per user (ARPU), and operating leverage.
Rising profits are the key driver of larger dividends because profits fund the passive income paid to shareholders.
Telstra's board of directors decided to hike the interim dividend by 10.5% to 10.5 cents per share in the FY26 half-year result following a solid rise in both underlying earnings and cash earnings.
According to Commsec projections, the business is forecast to increase its payout by 10.5% to 21 cents per share. At the time of writing, that translates into a dividend yield of 4.2% excluding franking credits and close to 6% including franking credits.
While that's not the biggest dividend yield on the ASX, I think Telstra's earnings (and therefore dividends) are very defensive compared to many other ASX shares.
FY27
The 2027 financial year could see the passive income picture get even better for shareholders.
Telstra's dividend is not guaranteed to grow every single year of course, but I think it's likely the payout can grow again in the 2027 financial year.
According to Commsec's forecast, Telstra is projected to increase its payout by 2.4% in FY27 to 21.5 cents per share. At the time of writing, that translates into a grossed-up dividend yield of 4.3% excluding franking credits and 6.2% including franking credits.
Is this a good time to invest in Telstra shares?
Analysts are not bullish on the valuation of the business at the moment. According to the Commsec collation of analyst opinions on the business, there are currently nine hold ratings, three buy ratings and one sell rating.
It looks like a solid option for passive dividend income, but there are other ASX shares that could be better buys.
