Here’s the Telstra dividend forecast through to 2025

The Telstra Group Ltd (ASX: TLS) dividend is one of the most popular options on the Australian share market for income investors.

It isn’t hard to see why this is the case. Over the last couple of decades, the telco giant has returned billions of dollars of its earnings to shareholders.

And while the NBN rollout hit its dividend payments hard, this headwind is now over and growth is back on the agenda.

In fact, Telstra surprised everyone in FY 2022 by increasing its dividend for the first time in years to a fully franked 16.5 cents per share.

Where next for the Telstra dividend?

The good news is that analysts appear to believe that it is onwards and upwards from here for the Telstra dividend.

For example, according to a note out of Goldman Sachs, its analysts are expecting Telstra to declare an interim dividend of 8.5 cents per share in February with its interim results. This is up from 8 cents per share last year and ahead of the consensus estimate of 8.2 cents per share.

Goldman then expects the same again in August, bringing its full year dividend to 17 cents per share. Based on the current Telstra share price of $4.11, this will mean a 4.1% dividend yield.

In FY 2024, the broker is expecting Telstra to increase its payout by a further 5.9% to 18 cents per share. This will mean a dividend yield of 4.4% for investors that year.

Finally, Goldman expects the Telstra dividend to increase by 11.1% in FY 2025 to a fully franked 20 cents per share. This equates to a yield of almost 4.9%.

Should you invest?

It isn’t just the Telstra dividend that is expected to increase by Goldman Sachs. Its analysts see scope for the Telstra share price to rise meaningfully over the next 12 months.

According to the note, the broker has a buy rating and $4.60 price target on its shares. This implies potential upside of 12% for investors from current levels.

The post Here’s the Telstra dividend forecast through to 2025 appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Buy Telstra shares for its defensive earnings and dividend growth: Goldman Sachs
• Generate passive income with these quality ASX 200 dividend shares: brokers
• 3 things that could super-charge your investment returns over the long term: Scott Phillips
• What could propel Telstra shares over the next year?
• Does Telstra sell bonds to ASX retail investors?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/Fg7x3XL