Telstra Group Ltd (ASX: TLS) shares are one of the few ASX blue-chip stock options that aren’t about banking or commodities. For that reason alone, it could be a solid option to consider for passive income.
These days, telecommunications could be one of the most defensive industries, given how important an internet connection is for households and businesses.
There’s no certainty around how technology will evolve in the coming years. However, data will likely become increasingly important, and I believe Telstra is well suited to meet that demand.
I think 5G (and 6G in the future) could increasingly challenge in the home internet market space. Telstra’s position as the current market leader in mobile, and its financial firepower to invest the most, could mean capturing some of the dollars currently going to the NBN.
During FY26, the number of 5G fixed wireless subscribers increased by 20.7% to 146,000.
Turning to Telstra’s FY26 performance, statutory earnings per share (EPS) grew by 5.3% to 19.9 cents, and cash EPS increased 13.8% to 25.5 cents. This helped fund a 10.5% increase in the dividend per share to 21 cents
What could the 2027 dividend payout be?
According to the projection on CMC Invest, the ASX telco share could deliver a larger payout to shareholders in FY27.
The current forecast suggests the company could hike its dividend to 22 cents per share in the 2027 financial year. That would be a year-over-year increase of 4.75%, which would noticeably outpace current inflation.
At the time of writing, that possible payout translates into a forward dividend yield of 4.6% excluding franking credits and 6.6% including franking credits.
There are not many ASX blue-chip shares that offer a dividend yield that high, whilst also growing the payout at a solid pace.
How many Telstra shares are needed for $12,000 of annual passive income?
To earn that much dividend income, we’re talking about a large investment. But it depends on whether an investor wants to include or exclude franking credits as part of the dividend income total.
If an investor doesn’t include franking credits, then to earn $12,000 per year of dividend cash, it’d take 54,546 Telstra shares.
If we include the franking credits, it would take 39,358 Telstra shares, assuming the same level of franking as FY26.
Overall, I think the ASX telco share has a promising future as an ASX dividend share. The 274,000 increase in mobile handheld users in FY26 (including 235,000 wholesale subscribers) is a strong driver of ongoing dividend growth. The future looks positive to me.
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Motley Fool contributor Tristan Harrison 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.