2 ASX dividend shares on my income watchlist

Mantra Group Ltd (ASX:MTR) shares and Telstra Corporation Ltd (ASX:TLS) shares offer some of the biggest, fully franked, dividend yields on the ASX.

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Mantra Group Ltd (ASX: MTR) shares and Telstra Corporation Ltd (ASX: TLS) shares offer some of the biggest, fully-franked, dividend yields on the ASX.

Mantra Group

Mantra Group is Australia's largest hotel and resorts operator, owning the BreakFree, Mantra and Peppers brands. Mantra does not own all of the underlying properties, including its hotels. Instead, it acts as the middleman between many property owners and management.

The Mantra share price has been slapped down 26% over the past year as investors grew nervous about the influence of Airbnb, the room-sharing service. Airbnb is changing the way many people stay and pay when on holidays and travelling for business.

Despite the presence of Airbnb, Mantra's business continues to do well — and pays dividends. At today's beaten-down share price, Mantra is tipped to pay 4% in fully franked dividends to shareholders.

Telstra

Telstra needs no introduction, being Australia's largest telecommunications company. However, that has not stopped the Telstra share price being sold down 21% in a year.

With the ongoing growth of TPG Telecom Ltd (ASX: TPM), Vocus Group Ltd (ASX: VOC) and the 100+ internet providers on the NBN, investors fear Telstra's dominance is fading.

However, a recent ACCC decision to restrict resellers like TPG and Vocus's Dodo from accessing other provider's mobile networks, like Telstra's, means Telstra's competitive advantage will last at least a little longer. On its old copper network, every reseller was allowed to use Telstra's copper cable network to sell broadband, so long as it paid a fee to Telstra.

Others like TPG had been hoping the Government would force Telstra to offer the same service on its extensive mobile network because that would avoid them having to spend money to create their own rural networks. However, Telstra's investment in rural mobile networks has again paid off.

While Telstra is not a growth business, thanks to its forecast 6% fully franked dividend yield its shares are on my watchlist. But I would only buy it at a better valuation.

Foolish Takeaway

Telstra and Mantra shares offer big dividends. However, I'm not rushing out to buy either of them. If I had to pick one to buy today it would be Mantra Group because it appears reasonably priced, offers a dividend and long-term growth potential.

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes and encourages your feedback. You can follow him on Twitter @OwenRask. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Telstra Limited. The Motley Fool Australia owns shares of TPG Telecom Limited and Vocus Communications Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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