Given the current Telstra Corporation Ltd (ASX: TLS) share price, I think there are better opportunities on the ASX right now.
I'll admit Telstra has a pristine history of paying juicy fully franked dividends to shareholders. Since 2005, in fact, Telstra has either kept or grown its yearly dividend payment, which I think is very impressive.
One dividend share I'd buy before Telstra
However, the world of telecommunications is changing rapidly. The growth of rivals TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC) could force Telstra up against the wall, making its dividend less reliable.
Fortunately, I think there is a better alternative to Telstra shares right now, if you are looking for dividends and growth.
I think Greencross Limited (ASX: GXL) shares could be a more rewarding dividend payer over the next few years. Greencross is a leading veterinary clinic and pet store owner, currently growing across the country. Greencross owns Petbarn, City Farmers and Greencross Vets, among others.
Greencross appears well managed and its business model is logical and effective. The company recently reported strong growth and set a robust full-year target, with profit around 10% higher than last year. Pleasingly, same store sales continue to expand, which tells me that more people are going to existing Greencross stores for their pets' needs.
To boost its growth, the company is rolling out in-store vet clinics, which is a sensible strategy. It means they don't have to foot the bill for completely new stores, and customers can access both services from the one convenient location. Company figures from the in-store clinics rolled out so far show that they are much more cost-effective and have a shorter repayment time compared to buying new vet clinics.
Greencross could also benefit from a modest tailwind, with the pet care industry growing at approximately 3% per annum. Greencross is still a somewhat high-risk investment, but I think it appears to be in a good place over the next few years. And while its forecast 2.7% dividend yield is less than Telstra's 6.4%, I think it makes up for the difference with raw growth potential.
