How good are the Aussie telco’s dividends versus its peers?
The post How does the Telstra (ASX:TLS) dividend compare to ASX 200 shares? appeared first on The Motley Fool Australia. –
In recent times, with the entry of NBN Co eating into the company’s profitability, that figure has been wound back to 70% to 90% of underlying earnings. That means the Telstra dividend is currently sitting at 2.53% as at Friday’s close.
So, how does that yield compare to other companies in the S&P/ASX 200 Index (ASX: XJO)?
How the Telstra dividend compares to ASX 200 shares
There are some monster dividends on offer among ASX 200 shares this year. A strong post-COVID rebound, the introduction of stimulus programs such as JobKeeper and significant monetary policy support have helped some Aussie companies thrive in recent months.
Fortescue Metals Group Limited (ASX: FMG) is one ASX dividend share that raised its dividend. Iron ore has been booming and Fortescue recently doubled its dividend after reporting a 117% surge in net profit after tax to US$10.3 billion.
For investors who think the 2.53% Telstra dividend is good, consider this: Fortescue shares are now trading at a 23.34% yield. As well as boosting its dividend, that yield figure has been helped by Fortescue shares slumping 38% in 2021.
Fortescue is certainly the exception rather than the rule and not necessarily a good benchmark for the Telstra dividend.
It can be hard to assess what an average dividend yield is for ASX 200 shares at the moment. One way is to consider the dividend yields on broad market exchange-traded funds (ETFs) benchmarked against the S&P/ASX 200 Index.
BetaShares Australia 200 ETF (ASX: A200) is one such ETF. It can be difficult to compare dividend yields given the number of variables affecting the breadth of companies in the ASX 200.
The October distribution for the BetaShares ETF was $0.6801 per security. A simple annualisation of that figure gives $2.7204 per security or a yield of 2.17%. That means the Telstra dividend looks to be higher based on a simple calculation against this ETF.
The Telstra dividend appears to stack up well against the broader ASX 200 shares. The Aussie telco certainly hasn’t delivered the chunky dividends it has been known for in recent decades. However, it still represents a reliable dividend payer and a staple of many Aussie portfolios.
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Motley Fool contributor Ken Hall 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.