Are Telstra shares a buy for their ‘dependable dividends’

Telstra Group Ltd (ASX: TLS) shares are holding steady today.

Shares in the S&P/ASX 200 Index (ASX: XJO) telco provider closed yesterday trading for $5.18. During the Thursday lunch hour, with more than $31 million worth of trades already transacted today, shares are changing hands for $5.18 apiece. (I’ll let you do the maths!)

For some context, the ASX 200 is up 0.4% at this same time.

Today’s modest underperformance isn’t what stockholders are accustomed to. Over the past 12 months, Telstra shares have gained 23%, or more than twice the 9.8% one-year gains posted by the ASX 200.

And that’s not including the passive income the company has paid out to eligible stockholders over the year.

Telstra paid a final fully-franked dividend of 9.5 cents a share on 25 September. The company will pay the 10.5 cents a share interim dividend, 90% franked, on 27 March. (It’s a bit too late to grab that one, as Telstra stock traded ex-dividend on 25 February.)

At the current share price, this sees the ASX 200 stock trading on a partly-franked trailing dividend yield of 3.9%.

Which brings us back to our headline question.

Are Telstra shares a good passive income buy?

Morgans’ Damien Nguyen recently ran his slide rule over the ASX 200 telco (courtesy of The Bull).

“This telecommunications giant offers stable earnings, a strong mobile network and dependable dividends, making it a defensive holding in a volatile market,” Nguyen said.

Explaining his hold recommendation on Telstra shares, he added, “However, while its core mobile business continues to perform well, the growth outlook is steady rather than exciting.”

On the passive income front, Nguyen concluded:

The stock appears fairly valued at recent levels, reflecting its predictable cash flows and limited near term catalysts. For now, Telstra remains suitable as an income‑focused hold due to its defensive earnings stream, but we don’t see a compelling reason to materially increase exposure.

What’s the latest from the ASX 200 telco?

Telstra reported its half-year results (H1 FY 2026) on 19 February.

Highlights included a 9.2% year-on-year increase in earnings before interest and tax (EBIT) to $2 billion. Amid the ongoing share buyback, earnings per share (EPS) were up 11% to 9.9 cents.

And on the bottom line, profit for the period was up 8.1% to $1.2 billion.

The interim Telstra dividend of 10.5 cents per share was up 10.5% from last year’s interim passive income payout.

“We delivered ongoing growth in earnings, reflecting momentum across our business, strong cost control and disciplined capital management,” Telstra CEO Vicki Brady said.

Telstra shares closed up 3.6% on the day of the results release.

The post Are Telstra shares a buy for their ‘dependable dividends’ appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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.