Why Telstra and Woolworths are passive income seekers’ delight?
Telstra and Woolworths offer reliable passive income which is supported by steady cash flows and business models built around essential needs.
Telstra Group Limited (ASX: TLS)
has a critical role in Australia’s digital economy as mobile connectivity, internet access and data services are essential for households, businesses and government operations.
FY25 was another year of steady financial progress as the company delivered underlying EBITDA of $8.6 billion and underlying NPAT of $2.3 billion.
Return on invested capital improved to 8.5% which shows better efficiency in how capital is being deployed across the business.
Telstra distributes fully franked dividends twice a year and the stock currently offers an annual dividend yield of 3.91%.
The company becomes attractive from a passive income perspective due to the predictability of demand as people rarely cancel mobile plans or disconnect internet services.
The outlook is stable as demand for data, connectivity and digital infrastructure continues to rise which is supported by ongoing investment in 5G, fibre networks, satellite connectivity and AI driven efficiency that should support long-term earnings and gradual margin improvement.
Woolworths Group Limited (ASX: WOW)
is one of the largest retail networks in Australia and supermarkets are among the most defensive businesses in the economy as consumers purchase groceries every week regardless of economic conditions.
During the first quarter of FY26, Woolworths reported total group sales of $18.5 billion which represented growth of 2.7% year-on-year as the company worked on rebuilding momentum through improvements to its Everyday Rewards program which helped increase customer engagement and digital traffic.
The company benefits from the scale and resilience of its core supermarket operations which generate stable and recurring cash flows across different economic cycles.
eCommerce is an important growth driver during the quarter as group online sales increased by 13.2% supported by strong demand for same day and on demand delivery services.
Woolworths distributes fully franked dividends twice each year and currently offers an annual dividend yield of 2.87%.
The predictability of grocery demand is a key strength for the business as households may reduce discretionary spending but still continue to purchase essential items.
(Source: Company Reports)
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