Woolworths Group vs Telstra Group shares: Which blue chip is better for passive income?

Looking for steady passive income from your investments? It’s hard to overlook two of Australia’s biggest blue-chip icons: Woolworths Group Ltd (ASX: WOW) and Telstra Group Ltd (ASX: TLS). Both are household names and staples in many portfolios — but which one deserves your cash if dividends and reliable returns are your top priority? Here’s how Woolworths shares stack up against Telstra shares for income-focused investors.

The case for Woolworths Group

Woolworths is a retail giant, dominating the Australian supermarket sector and also owning Big W in Australia plus several New Zealand grocery chains. With its vast network of stores and a brand reputation for reliability, Woolworths has been the go-to for grocery essentials for decades. According to its most recent public description, the company operates over 1,400 stores and employs a huge workforce across Australia and New Zealand.

From a dividend perspective, Woolworths has long been regarded as a defensive play: groceries and essentials tend to be in demand regardless of how the economy is faring, which can mean stable revenues and regular profits.

Top fundamentals include:

• Dividend yield of 2.53% (fully franked at 100%)
• P/E ratio of 41.38, which is on the high side compared to many other blue chips
• Year to date return of 33.6%, showing strong recent share price momentum

Woolworths has a long history of fully franked dividend payments, and its latest dividend was $0.52 per share, paid in September 2026.

The case for Telstra Group

Telstra is Australia’s largest and best-known telecommunications provider, spanning mobile, internet, and enterprise solutions. With a widespread network and a historic reputation for dividend consistency, Telstra is often viewed as a classic income stock. The company has been revamping its operations in recent years, with several subsidiaries under the Telstra Group banner after a 2022 restructure.

For those chasing passive income, Telstra ticks a few appealing boxes:

• Dividend yield of 4.37% (franked at approximately 90%) — comfortably beating Woolworths on headline yield
• P/E ratio of 24.17 — much lower than Woolworths, suggesting a more moderate valuation relative to recent earnings
• Year to date return of 3.1% — more subdued share price growth than Woolworths this year

Recent dividends have been $0.105 per share (final, September 2026) and $0.105 per share (interim, March 2026), mostly fully franked.

Valuation comparison

Here’s how Woolworths and Telstra stack up on the key valuation and dividend figures that matter most to income-oriented investors:

	Woolworths Group	Telstra Group
Market Cap	$46.57 billion	$53.58 billion
P/E Ratio	41.38	24.17
Dividend Yield	2.53% (100% franked)	4.37% (c.90% franked)
Dividend per Share	$0.97	$0.21
Earnings per Share	0.925	0.199

Note: Woolworths’ higher P/E ratio means investors are paying more for each dollar of reported earnings than with Telstra. Woolworths currently has full franking, which can be very valuable for those on lower tax rates or SMSF investors, whereas Telstra’s recent dividends have been about 90% franked.

Recent share price momentum

Looking at the most recent shared closing date of 6 October 2026:

• Woolworths closed at $38.12, down 0.42% on the day, but remains up a very strong 33.6% year to date.
• Telstra closed at $4.81, flat on the day, delivering a year to date return of 3.1%.

Which is the better buy?

For passive income seekers, Telstra Group stands out thanks to its much higher headline dividend yield (4.37% vs Woolworths’ 2.53%), plus a still-solid degree of franking on recent payments. While Woolworths easily takes the lead on recent share price gains, its yield is materially lower and its P/E ratio is far higher, suggesting it may be priced for stronger growth than is typically delivered by supermarket stocks.

That said, Woolworths’ defensive qualities and fully franked dividends remain attractive, especially for those wanting reliability in tougher economic climates. But if my main priority is income — particularly in the form of regular, meaningful cash flow — I’d lean toward Telstra Group right now. The yield is simply more generous, and it trades on a lower earnings multiple, which helps reassure me that I’m not overpaying for those dividends.

The post Woolworths Group vs Telstra Group: Which ASX blue chip pays better passive income? appeared first on The Motley Fool Australia.

More reading

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• 3 defensive ASX shares I’d buy in a market sell-off
• How much must I invest in Telstra shares to earn a $1,000 passive income in 2027?

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial draft. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Owners of Woolworths Group Ltd (ASX: WOW) shares have seen their dividends bounce around over the past decade or so. But, analysts think the supermarket business could have turned a corner and deliver consistent growth.

Woolworths’ dividend is funded by various segments, including its Australian supermarkets, New Zealand supermarkets, business-to-business (B2B) food suppliers, BIG W, Petstock and more.

Following a 15.4% rise of underlying net profit to $1.6 billion in FY26, Woolworths decided to hike its annual dividend per share by 15.5% to 97 cents.

If the company continues to deliver higher profits, the dividend is likely to continue rising. Let’s have a look at what analysts think could happen with the Woolworths dividend in the coming years.

FY27

According to the projection on Commsec, the supermarket business is forecast to increase its payout by 15% to $1.115 per Woolworths share in FY27. Time will tell whether the business can deliver that level of growth, but the start of the 2027 financial year certainly looked promising.

In the Australian supermarket segment, total sales grew by 7.6% in the first eight weeks of FY27. It said that sales momentum was further strengthened during the period of the Disney Ooshies program, which is estimated to have added between 1.5 to 2 percentage points of additional sales growth. This is the largest and most important division, so strong sales growth is significant for the overall company.

New Zealand food total sales increased by 4.2% in the first eight weeks of FY27, with improved momentum in the fourth quarter reflecting some benefit from Disney Ooshies.

The business also said that BIG W total sales declined “modestly” in the first eight weeks, reflecting ongoing cost-of-living pressures on households, particularly budget customers and weaker trade in the everyday business.

Woolworths expects customers to remain value-focused in the year ahead and it’s committed to limiting the impact of rising costs with low and dependable prices.

The company said it aims to be even more efficient, leveraging technology to be more productive in order to reinvest in itself.

Trading conditions are expected to remain subdued for New Zealand supermarkets and challenging for BIG W.

The projected payout for FY27 translates into a potential grossed-up dividend yield of 4.1%, including franking credits, at the time of writing.

FY28

We’ll see how future financial years play out for the wider economy, but analysts expect the business can continue its dividend growth in future years.

The forecast on Commsec suggests the business could hike its annual dividend per Woolworths share by 7.2% to $1.195 in FY28.

FY29

The earnings and dividend are projected to become even better in the last year of this decade.

The projection on Commsec suggests that the business could hike its annual dividend per share by another 8.1% to $1.292 per share in FY29. That suggests the grossed-up dividend yield could be 4.8%, including franking credits, by the end of the decade.

Hopefully the payouts are more defensive going forwards. But, it’s not the biggest dividend yield around, so there could be other ASX shares that offer better returns.

The post Here’s the dividend forecast out to 2029 for Woolworths shares appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Atlas Arteria Group (ASX: ALX) shares are $3.82, up 0.4% today and down 20% over 12 months.

Atlas Arteria is a toll roads owner, operator, and developer.

The company owns five toll roads in France, Germany, and the United States.

This year, Atlas Arteria shares paid investors an unfranked annual dividend of 40 cents per share.

According to analyst predictions published on CommSec, Atlas Arteria is expected to pay 37 cents per share in 2027.

Based on today’s share price, that equates to a dividend yield of 9.7%.

That’s more than twice the average 4.2% yield delivered by the S&P/ASX 200 Index (ASX: XJO) last financial year.

How much is that in dividends?

If I bought $15,000 worth of Atlas Arteria shares today, I’d own 3,926 shares.

If the experts are right, and I were to receive 37 cents per share in dividends in 2027, that would equate to $1,452.62.

The experts have also provided a dividend prediction for 2028.

They expect Atlas Arteria shares to pay 44 cents per share in dividends.

On a $15,000 investment, that would give me $1,727.44 in dividends.

That equates to a dividend yield of 11.5%.

Do the experts recommend Atlas Arteria shares?

Atlas Arteria shares have paid 40 cents per share in annual dividends since 2022.

However, that doesn’t guarantee anything about the future.

Before you buy a stock for income, you have to do your research and feel satisfied that the dividend yield is sustainable long term.

Before you start that process, let’s take a look at some expert ratings on the stock.

Morgans has a hold rating on Atlas Arteria shares with a 12-month share price forecast of $4.74.

That implies about 24% potential upside ahead.

In a note, Morgans noted the possibility that IFM Investors might be back with another takeover offer.

IFM offered $4.75 per share in April, with a promise to increase it to $5.10 if its stake rose above 45% by the offer’s closing date.

The Atlas Arteria board rejected the offer.

The offer period closed in July, by which point IFM has increased its stake from 34.5% to 67.4%.

Citi also has a hold rating on Atlas Arteria shares with a 12-month target of $4.80, implying 26% upside ahead.

RBC Capital has a sell rating with a $3.60 target, suggesting a 6% downside ahead.

Macquarie gives Atlas Arteria shares a buy rating with a $4.75 target.

Atlas Arteria share price snapshot

The Atlas Arteria share price has fallen 20% over 12 months and 37% over five years.

The post If I invest $15,000 in Atlas Arteria shares, how much would I get in dividends? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.