Owners of Telstra Group Ltd (ASX: TLS) shares can walk with a spring in their step today because there's going to be more dollars in their bank account. The Telstra dividend is being paid today!
The ASX telco share likes to regularly reward investors with a dividend payment as a way to share Telstra's profit with shareholders.
This latest payment is the Telstra FY23 final dividend.
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Telstra dividend
The Telstra board decided with the FY23 result to pay a final dividend of 8.5 cents per share. This was the same payment as last year.
However, it brought the full-year dividend to 17 cents per share for FY23, which was 3% higher than the FY22 payout.
The business is sending 8.5 cents per share to investors – if someone had 1,000 Telstra shares then they'd receive a fully franked dividend of $85.
At the current Telstra share price, today's dividend represents a fully franked dividend yield of 2.2% or 3.15% grossed-up.
Investors also had the opportunity to take part in the dividend re-investment plan (DRP) where shareholders would receive new shares rather than a cash dividend. Telstra said that the DRP price for new Telstra shares is $3.98, which had a DRP discount rate of 0%.
Will future payments be bigger?
Telstra is working hard to grow its profit, with price increases for subscribers, it's investing heavily in its 5G network, and it's trying to keep a lid on costs.
On Commsec, the current projection suggests that the Telstra annual dividend could increase by another 5.9% to 18 cents per share in FY24. That would translate into a fully franked dividend yield of 4.7% and a grossed-up dividend yield of 6.7%.
In FY23 it generated underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $8 billion. In FY24, it's expecting underlying EBITDA to rise to between $8.2 billion to $8.4 billion, suggesting growth of between 2.5% to 5%.
Despite inflation, the business said it's still committed to delivering its FY25 underlying EBITDA and earnings per share (EPS) growth ambitions.
Telstra share price snapshot
Over the last six months, the Telstra share price has fallen 8%, while the S&P/ASX 200 Index (ASX: XJO) has only declined by 8%.
