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Telstra: The best SMSF stock?

Self-Managed Super Funds love Telstra (ASX: TLS) because its ticks all the boxes. It can fit into almost any portfolio because it can be applied to almost any investors objectives and needs.

Telstra has drawn many investors into its arms with market smashing dividend yields and fully franked returns. Its 28-cent dividend play is also one of the most reliable and stable dividends on the market — since 2005 it has paid the same rate without fail. Consistency is something investors at the helms of their own superannuation always appreciate.

Technology and the internet have made many people dependent on services that would not normally be possible without it. In Australia, many investors realise that, positioning themselves for a decade of growing internet technologies and services, is possibly easiest through internet and data providers like Telstra.

Telstra will stand to directly benefit from the NBN rollout and its increasing market share of mobile devices. It also has plans for an internet technology that will be faster than the 4G networks currently available. CEO David Thodey recently said that customers will also stand to benefit under a new focus on customer service, aiming to improve on Telstra’s track record and build on customer referrals.

There are many who doubt the company’s potential for growth, but you’ve got to ask yourself whether the banks, like Commonwealth (ASX: CBA) or Westpac (ASX: WBC), have more potential. Either way, hedging your bets with a 6% fully franked dividend is significant and if you’re investing timeline is long term, history tells us that Telstra is likely to go higher.

Foolish takeaway                                                                                                                     

Telstra’s recent market rally to five-year highs was too quick too soon, but does not indicate the presence of a poor company. In the half year ended 31 December 2012, it showed an 8% gain in NPAT. Compared with the big banks who struggled between 1-2%, Telstra has got long term growth, solid market base and income.

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Motley Fool contributor Owen Raszkiewicz does not own shares in any of the companies mentioned in this article. 

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