The Telstra Corporation Ltd (ASX: TLS) share price has fallen 4% today following the release of its half-year financial results.
Telstra revealed a pretty disappointing result, it's fair to say. Revenue and profit both fell, which is never a good thing.
What's more, the company forecast slim growth over the remainder of the year. Hardly reassuring.
Could you add $2,000 extra income with this ASX blue chip?
Fortunately for shareholders, one positive to take away from today's result was the dividend payment of 15.5 cents per share, fully franked no less.
Sure, there's the big questions around dividend sustainability.
Such as, will it lower the dividend if profits fall? What happens if the NBN rollout continues to chew through profits?
What happens if Optus, TPG Telecom Ltd (ASX: TPM) or Vodafone offer massive mobile data packages for a fraction of the price of Telstra's products?
These questions will linger for some time.
Nevertheless, Telstra's half-year dividend payment of 15.5 cents per share puts its full-year payout on track with last year's 31.5 cents.
That means, if (as we know it's a big 'if') Telstra can pay 31.5 cents again this year, its shares are currently trading on a dividend yield of around 6.4%. Grossed up for those tax-effective franking credits, that's a potential dividend income of 9.1%.
Put another way, if you invested $22,000 into Telstra shares today, and it paid the same dividend as last year, you would receive a gross dividend of $2,000 this year.
Sure, that's risky.
But to lower that risk you could consider diversifying across other shares like National Australia Bank Ltd. (ASX: NAB) or Wesfarmers Ltd (ASX: WES), each of them offer big dividend yields, too.
Buy, hold or sell
Dividends can generate a fantastic tax-effective income stream for retirees, those seeking extra income, or younger people looking to grow their wealth. However, it is important to be smart about what shares you buy and consider their risks and future outlook.
In my opinion, Telstra shares are not in the buy zone.
