When I think about ASX dividend shares, it’s hard to look past Telstra Group (ASX:TLS) share.
At the close of the ASX on Thursday afternoon, Telstra shares were up 0.19% at $5.34 a piece.
Thursday’s rally continued the impressive gains the telco has made over the past 12-18 months. Earlier this month, Telstra shares hit a 10-year high of $5.44, and they are still trading just below that level.
At the time of writing, Telstra shares are up almost 10% this year and 20% over the last year. This growth has been quite gradual but also consistent.
For reference, at the time of writingThe S&P/ASX 200 Index (ASX:XJO) is up 0.75% so far this year And 11% more than 12 months ago.
Some investors may be disappointed by Telstra’s almost high share price, but I still see this as a great opportunity to buy a high quality ASX dividend stock at a good price.
here’s why.
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Telstra is a strong and reliable business
Telstra is a classic defensive stock.
These days, Internet access and mobile phone connectivity are basic daily necessities rather than luxuries.
This means that no matter how high inflation gets, or how much the cost of living rises, or how severe global uncertainty becomes, the company’s offering will remain a high priority for Australians.
In other words, ASX dividend stocks are likely to perform consistently regardless of the stage of the economic cycle.
Take Telstra’s latest first half FY26 update, for example.
In February, the telco implicitly posted to that group EBITDA There was growth in all major business sectors. Its mobile services revenue for the six-month period was 5.6% higher and group cash EBIT was 14% higher. Underlying operating expenses were also reduced by 2.4%.
The results show that the company has forecast cash flow And reliable earnings. It’s a classic for strong people ASX defensive shares.
And that’s great news for investors who want to hedge against potential volatility elsewhere in the index.
It pays reliable and growing passive income to its shareholders
Due to its defensive, natural and reliable earnings, Telstra can pay investors a reliable passive income with good dividend yield.
The company historically pays two dividends to its shareholders each year, in March and September. An interim 10.5 percent dividend, worth 90.48% of the franc, was paid to investors in March.
The telco is expected to pay a total dividend of 20 cents for FY26, representing an increase of 5.25% year-on-year. At the time of writing this means the dividend yield is around 3.8%
Dividend payout for FY27 is expected to increase again to 21 cents per share.
Analysts are indicating more growth in the times to come For ASX Dividend Stocks
Despite this year’s share price rally, brokers rate Telstra shares as a buy. However, Market Index data shows that the average target price of $5.30 currently implies a downside of 1.5% for the ASX dividend stock.