Should I sell my Telstra shares in May?

Telstra Group Ltd (ASX: TLS) shares are climbing higher in lunchtime trading on Thursday.

At the time of writing, the telco stock is up 0.86% to $5.30 a piece.

Today’s uptick means the shares are now 9% higher for the year-to-date and 17% higher than 12 months ago. The stock peaked at a 10-year high of $5.44 earlier this month.

Now many are questioning whether the shares have reached a ceiling, or whether there could be more price hikes this year.

Here’s what the experts think.

Is there an upside ahead for Telstra shares?

Market Index data shows brokers still rate the telco’s shares as a buy, and they tip an upside of 0.6% to an average $5.30 12-month target price, at the time of writing.

TradingView data shows analysts are a little more divided over the stock. Out of 15 ratings, only four have a strong buy stance and another 11 have a hold rating on the shares. But they have an average target price of $5.26, which implies a minor 0.7% downside over the next 12 months.

Either way, it doesn’t look like we’ll continue to see the same level of gains Telstra shares have enjoyed recently.

But upsides and potential target prices aren’t the only reason that investors should look into holding Telstra shares.

Telstra shares are a classic passive income play

Telstra is Australia’s largest telecommunications company, owning and operating the nation’s biggest mobile network (covering  around 99.7% of the population) and acting as a major fixed-line internet provider. The company also owns and operates the country’s  largest 4G and 5G network.

It’s this market dominance which makes Telstra shares a fantastic opportunity for passive income.

After all, internet access and mobile phone connectivity aren’t considered just a perk anymore, they’re necessary for everyday life. 

This means the company can perform well, regardless of what the rest of the market is doing.

And we can see this from the company’s latest financial results.

Telstra posted a strong half-year FY26 result in February which showed that its profit and earnings have increased, with gains seen across every financial metric and division.

Telstra’s defensive nature also means it can pay its shareholders a consistent and reliable passive income. 

The telco historically paid out two dividends per year, in March and September. In March, investors were paid an interim dividend of 10.5 cents, 90.48% franked. That’s a 10.5% increase from the previous payment.

The telco is forecast to pay a total 21 cent dividend for FY26, which translates to a dividend yield of 3.9% excluding franking credits, at the time of writing. 

For FY25, the company paid investors an annual dividend of 19 cents per share. 

So, should I sell my Telstra shares in May?

It looks like the Telstra share price could well hover around the same level in May and beyond. The telco’s passive income is also a reasonable reason to buy into the stock. 

As far as I’m concerned, there isn’t any compelling reason to sell up. I’d hold tight for now.

The post Should I sell my Telstra shares in May? appeared first on The Motley Fool Australia.

More reading

• $250,000 to invest for passive income? Here’s how I would build a portfolio
• Is it time for investors to turn back to defensive ASX shares?
• Is the Telstra share price a buy for its 5.4% dividend yield?
• 3 top ASX income ideas beyond CBA and the big four banks
• Are Telstra shares a good deal at $5.32?

Motley Fool contributor Samantha Menzies 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.