When it comes to passive income, Telstra Group Ltd (ASX: TLS) shares are up at the top of my list.
As an ASX telecommunications business, the company is classically defensive. Which means that no matter how high inflation gets, or what state the Australian economy is in, its services will always be in strong demand.
After all, the telco owns and operates Australia’s largest mobile network, and is also a major home internet provider. Both of these are considered essential services.
The defensive nature of Telstra means the company has a strong competitive advantage over other ASX shares, and it also means it can generate stable earnings and revenue on a consistent basis.
As a result, it can pay reliable passive income to its shareholders through dividend payments.
How often does Telstra pay dividends to shareholders?
Telstra traditionally pays its shareholders two dividends every year, in March and September. Until FY26, these have been fully-franked. But in March this year, and again this month, the dividend payments have been partially franked at 90.48%.
How much has Telstra paid its shareholders in FY26?
Telstra paid its shareholders a partially franked 10.5 cent-per-share dividend in March, and a final 9.5 cent fully franked dividend this month.Â
That totals 21 cents for FY26, giving a dividend yield of around 4.3%.
What’s the forecast for the telco’s dividend for FY27?
Based on the latest Commsec forecasts, the telco is also expected to pay a total dividend of 22 cents per share in FY27.
At the $4.87 share price at the time of writing, a 22 cent dividend translates to a forward dividend yield of around 4.5% for FY27.
So, how many Telstra shares do I need to generate $500 of monthly passive income in FY27?
Remember, Telstra doesn’t pay dividends on a monthly basis. So first you need to calculate what a $500 per month passive income is over the financial year. That’s $6,000.
In order to earn $6,000 per year in passive income from Telstra shares, at 22 cents per unit, you’d need to own around 27,272 shares.
To buy all of those shares right now, you’d need to invest just over $132,814.
Can Telstra’s dividend payout keep climbing higher?
Well, according to Commsec data, yes. In fact, Commsec forecasts that Telstra’s dividend will increase again to 22.5 cents in FY28. It’s not a huge increase, but the benefit of a defensive stock is stability, and that’s what Telstra shares can provide its shareholders.Â
The post How many Telstra shares do I need to buy to earn $500 of passive income every month? appeared first on The Motley Fool Australia.
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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.
