Is the Telstra dividend going to increase again soon?
The post When will the Telstra (ASX:TLS) dividend increase? appeared first on The Motley Fool Australia. –
Luckily for income investors there are plenty of quality options for them to choose from. One of those could be the Telstra Corporation Ltd (ASX: TLS) dividend.
Why the Telstra dividend?
After years of earnings declines and dividend cuts, this telco giant is now on the path to growth again. This follows a highly successful T22 strategy and the recent announcement of its upcoming T25 strategy.
That strategy will see Telstra aim for sustained growth and value by targeting mid-single digit underlying EBITDA and high-teens underlying earnings per share compound annual growth rates (CAGR) from FY 2021 to FY 2025.
Telstra’s CEO, Andy Penn, commented: “Today’s announcement of T25 marks our transition from transformation to growth, from a strategy we had to do, to a strategy we want to do to focus on growth.”
“It is a strategy that builds on the strong foundations we have built over the last three years and remains focussed on what matters most – our customers, our people, our shareholders and on supporting the creation of a vibrant digital economy for Australia,” he added.
The announcement of this strategy has many analysts believing that Telstra dividend increases could happen at long last in the coming years.
For example, the team at Goldman Sachs have pencilled in dividends of 18 cents per share in FY 2024 and then 19 cents per share in FY 2025.
For now, though, the broker is expecting the Telstra dividend to remain at 16 cents per share fully franked in FY 2022 and FY 2023.
Based on the current Telstra share price of $3.85, this represents a 4.1% dividend yield.
Are Telstra’s shares good value?
Goldman also sees plenty of upside left in the Telstra share price. It currently has a buy rating and $4.40 price target on its shares.
This suggests that there is 14% upside for the Telstra share price over the next 12 months. And if you include its dividend, the potential total return stretches to a very attractive 18%.
Overall, this could make Telstra a top option for investors this month.
Should you invest $1,000 in Telstra right now?
Before you consider Telstra, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Telstra wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
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Motley Fool contributor James Mickleboro 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 owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.