The Telstra Group Ltd (ASX:TLS) share price could be an appealing buy right now, particularly for investors who also want dividends.
Telstra is Australia’s biggest telecommunications business. The company has a long history and has evolved from being part of the Postmaster-General’s Department in 1901, to the ASX 200 listed company it is today. Telstra has mobile, internet, enterprise, cybersecurity, telecommunications infrastructure, Pacific operations and more.
Here’s why I think Telstra could be a good buy for investors who want a slice of one of Australia’s largest businesses with a side of steady dividends.
Growing profit
In Telstra’s FY25 result it reported that its total income increased 0.5% to $23.6 billion. A key segment for Telstra is its mobile division, which saw income rise 3% to $11 billion in FY25.
Average revenue per user (ARPU) for handheld per month grew 2.1%, up from $42.82 in FY24 to $43.71 in FY25. The number of mobile handheld users saw 0.6% growth.
Telstra saw its underlying EBITDA (EBITDA explained) rise by 4.6%, which is an increase from $8.2 billion in FY24 to $8.6 billion in FY25. Underlying net profit after tax (NPAT) for FY25 also saw an increase with 1.8% growth on FY24.
These are good numbers to see, with Telstra continuing to grow despite being such a large and established company. Rising profit is a key metric for justifying a higher Telstra share price.
Increasing dividends
Telstra is known as one of Australia’s classic blue chip dividend shares. At the current Telstra share price, it has a dividend yield of 3.9%, excluding the bonus of franking credits.
Pleasingly, its dividend per share (DPS) increased from 18 cents per share in FY24 to 19 cents per share in FY25, representing a rise of 5.6%. Telstra also increased the dividend per share by 1 cent in FY24.
It looks like the $0.01 increase trend will continue, with the forecast for Telstra’s FY26 dividend at 20 cents per share according to the projection on Commsec.
An appealing Telstra share price valuation
I think the Telstra share price is currently at a reasonable valuation for a long-term buy, with the share price having fallen by 3.5% in the past month.
The company is predicted to generate earnings per share (EPS) of 20 cents in FY26 according to Commsec. That means Telstra currently has an FY26 price to earnings ratio (P/E ratio explained) of less than 25.
Society is becoming increasingly digital and that could mean more users, multiple devices per user (like smart watches) and more people signing up for 5G. This could represent a tailwind for Telstra’s earnings if the digital world presents these increasing demands from everyday people.
Telstra shares look like a good long-term investment with growing profit and dividends. But there are other ASX dividend shares I like even more.
