As the final quarter of 2026 starts to get going, two of Australia’s top stocks in Telstra Group (ASX: TLS) and Goodman Group (ASX: GMG) are locked in an interested contest for the last remaining spot in the ASX’s top 10 by primary market cap. The outcome into year end will likely be decided by risk appetite, with either defensive income winning the day, or high-growth names staging a comeback.
These two completely different companies make an interesting comparison, with some historical averages far closer together than might initially seem likely.
The gap between the two companies is razor-thin as far as market cap, and has been flip flopping in recent months. Goodman Group holds a marginal lead with a market cap of A$54.04 billion, compared to Telstra’s A$53.58 billion, a difference of just A$460 million, or less than 1% of either.
Looking at recent price action, Telstra shares have held their ground well, trading down just 1.23% year-to-date, a performance that reflects the steady, predictable nature of its cash flows and the gravitational pull of its 4.37% fully franked dividend yield in an uncertain macro environment. Goodman Group, by contrast, has endured a far rougher ride, with shares falling back 14.67% YTD as broader real estate sector headwinds, cap-rate sensitivity, and rising construction timelines weighed on sentiment.
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Despite a clear gulf through the first three quarters of 2026, zooming out brings the two close together. Both stocks have delivered strikingly similar returns over the past five years, with Telstra up 23.65% and Goodman up 23.82%, a statistical near-dead heat that underscores how two very different business models can arrive at the same destination via entirely different routes.
Telstra vs Goodman Group: The Fundamentals
Telstra’s FY26 results provided a solid foundation for its defensive positioning. The telco reported underlying EBITDAaL of A$8.3 billion, up 4% year-on-year, and cash earnings of A$2.9 billion, a robust 11.6% increase. Management followed through on shareholder returns in a meaningful way, lifting cash dividends by 10.5% and launching an on-market share buyback of up to A$1.0 billion.
The buyback, combined with the high-yield dividend, creates a dual support mechanism for the share price heading into year-end, a structure that tends to attract institutional income mandates and self-managed superannuation funds (SMSFs) in Australia’s unique franking credit-conscious market.
The ongoing structural separation of Telstra’s infrastructure assets through its InfraCo and ServeCo divisions continues to progress, with divestments completed in wholesale voice and European hosting units during FY26, and further asset completions scheduled into FY27. These moves are designed to surface embedded value and sharpen the operational focus of the core business, though the enterprise and international divisions continue to face structural headwinds that partially offset mobile segment growth.
On the valuation front, Telstra trades at a current P/E of 24.21x and a forward P/E of approximately 22.7x. For a company delivering single-digit earnings growth, that multiple sits at a premium; a reflection of the scarcity value markets attach to reliable, franked income streams in the Australian context.
Goodman Group Transforming
Goodman Group’s FY26 story is one of transformation at scale, having reported operating profit of A$2.68 billion, up 15.7% year-on-year, with operating earnings per share of 129.9 cents, representing 10.1% growth. Management has guided for a further 9% operating EPS growth in FY27, underpinning the longer-term earnings trajectory even as near-term sentiment remains subdued.
The defining strategic narrative for Goodman is its accelerating pivot toward hyperscale data centres. Work-in-progress expanded 53% to A$19.7 billion, with a striking 78% of that pipeline concentrated in data centre projects across tier-1 global markets. The company holds a global power bank of 6.4 gigawatts across 16 cities, positioning it as one of the world’s most significant private-sector players in AI compute infrastructure.
Recent deal flow reinforces the scale of this ambition. In August 2026, Goodman signed a landmark 20-year lease with a global hyperscale customer for its 1 GW Tsukuba Tech Central campus in Greater Tokyo, the kind of long-duration, investment-grade tenancy that anchors future cash flow visibility. Closer to home, the company secured planning approval for Project Apollo, a A$1.4 billion, 135-megawatt data centre in Macquarie Park, Sydney.
Goodman’s balance sheet remains conservative, with group gearing at 6.5% (look-through at 19.5%) and A$6.4 billion in available liquidity. The company currently trades at a current P/E of 19.78x and a forward P/E of 18.4x, a meaningful discount to Telstra on a forward earnings basis, despite carrying a materially higher growth profile.
Dividends The Difference Maker?
The dividend picture, however, is where the two companies diverge most sharply. Goodman’s approximately 1% yield offers a much smaller income protection to Telstra @4%+, a structural feature of a company that reinvests heavily into its development pipeline rather than distributing capital. For income-oriented investors, this is a significant differentiator in favour of Telstra, and will also have had an impact on the performance over recent years as far as total returns.
With barely 1% of current market cap separating them, and fundamentally different engines driving each business, Telstra and Goodman Group offer markets a genuine choice between the certainty of today’s income and the promise of tomorrow. As far as which company ends 2026 in better form, it will most likely be a reflection of the broad risk appetite, where defensive value and income play against growth and the digital infrastructure trade.
