Telstra Group Ltd (ASX: TLS) shares look attractive to me at the current valuation and amid all of the global uncertainty.
Telstra is Australia’s biggest telecommunications business. It’s involved in mobile, fixed internet, enterprise, cybersecurity, telecommunication infrastructure, Pacific operations and more.
With everything going on with tariffs and other global uncertainties, there are a few reasons why Telstra shares could be attractive.
Resilient and growing earnings
Telstra’s earnings could be one of the most defensive in the ASX 300 (ASX: XKO) because every adult and business seems to have an internet connection and I’d guess they’d continue paying for it over most other expenses.
The ASX share’s earnings shouldn’t be affected much by tariffs or changes in the global economy, making it defensive, in my opinion.
Telstra’s mobile numbers continue growing, boosting operating leverage and helping the company’s overall profit. The HY25 result saw total income go up 0.9% to $11.8 billion, EBITDA rose 6% to $4.2 billion and net profit for Telstra shareholders climbed 6.5% to $1 billion. That profit growth, combined with dividends, is a good mix of returns for Telstra shares, in my opinion.
Big dividend
Telstra is regularly rewarding investors with large dividend payments. The HY25 result saw the dividend per share bumped up by 5.6% to $0.095 per share. The payout was pleasingly more than I was expecting from that result.
Dividends are not as safe as term deposits, but Telstra seems determined to continue sending big payments to shareholders every result.
According to the forecast on Commsec, Telstra could pay a dividend yield of 6.3%, with the franking credits attached.
Good time to buy Telstra shares?
When there’s huge amounts uncertainty in the air, a stable business could be the one to go for.
Telstra’s valuation could benefit from the fact that the official cash rate from the RBA could reduce further in the next 12 months. This could make a defensive business that offers a consistent (and growing) flow of dividends seem more appealing.
I think Telstra’s profit could grow more than most other ASX 20 businesses in the next three or four years, making it very attractive in my view.
