The BT Group (LSE: BT.A) share price obtained a pleasant increase in Could, on the again of a wholesome set of full-year outcomes.

The important thing factors have been summed up by CEO Allison Kirkby, who informed us the agency had handed “peak capex on our full fibre broadband rollout“.

BT hit its £3bn price financial savings plan a full yr forward of schedule, too. And he or she added that “we’ve now reached the inflection level on our long-term technique“.

What does it imply?

BT nonetheless has big debt, and it nonetheless faces a giant pension fund deficit. But when we actually have simply seen a turnaround level, I believe we may face a brand new actuality.

And that actuality is that my fears for the BT dividend would possibly now be up to now.

I’ve by no means had an excessive amount of confidence in it. But when earnings and money stream do make a flip for the higher from now, I reckon the long-term dividend prospects may be stable.

And BT would possibly simply be a pleasant inventory for constructing up a little bit of future passive revenue.

Passive revenue

The dividend yield is at the moment forecast at 5.7%. And that’s a pleasant return, particularly if it’s sustainable. Forecasts see it secure for the following few years, although I’d hope for long-term money rises.

The excessive yield itself is a direct results of the fallen share price, although, so that may not final.

I see an opportunity of share price progress now, and a turnaround from the droop of the previous decade… It’s exhausting to keep in mind that, as lately as 2015, BT shares reached 500p.

Anyway, let’s simply say a modest 2% per yr from price progress. That’s in keeping with what the Financial institution of England desires to get inflation again down to.

In order that’s a complete annual return of seven.7%, a bit forward of the long-term FTSE 100 common. What would possibly that earn in passive revenue?

Lengthy-term wealth

Say I can handle to make use of half my annual ISA allowance, and put away £10k every year. If all of it goes into BT, and I reinvest my dividends in additional shares, I may construct up a fairly penny.

Doing it for 20 years may set me up with a pot of £460,000, greater than double the money I’d put in. Hold it up for 30 years, and I may have over 1,000,000 kilos, or greater than 3 times my complete quantity invested.

And that, even at a smaller dividend yield than BT’s present 5.7%, may internet me a really good annual passive revenue.

Hazard

Now, I reckon it might be insanity to place all my cash into one inventory. So if I ever purchased BT shares, it might be a part of a diversified portfolio together with my different dividend shares.

And BT does nonetheless face a really actual danger from its debt pile. Oh, and from competitors.

Nonetheless, it’s good to speak. And speak prices cash… cash that might contribute to a pleasant long-term passive revenue for shareholders.