Transurban Group, Telstra Corporation Ltd and Ten Network Holdings Limited: Should you buy?

Between them, Transurban Group (ASX: TCL), Telstra Corporation Ltd (ASX: TLS) and Ten Network Holdings Limited (ASX: TEN) have over 16 billion shares on offer. So it’s no wonder so many Australian investors hold them in their portfolios. However the question is: Do they deserve a spot on yours?

Transurban Group

Transurban is the owner of Australian toll roads such as Citylink, Lane Cove Tunnel, Hills M2, Eastern Distributor, Westlink M7, M5 South West and, more recently, the Queensland Motorways portfolio of assets which includes the Gateway Motorway, Logan Motorway, Clem Jones Tunnel and Go Between Bridge. It also owns a number of assets in Virginia, USA.

Being an infrastructure owner, Transurban has a licence to print money because it knows motorists will continue to use its services through thick and thin. For example, during the fallout of the GFC its revenues by fell only 3.6%. With constant toll price increases, road widening and acquisitions, there are many growth options available to management.

Based on FY15 forecast earnings per share, Transurban trades on a P/E of 33 and dividend yield of 5.1%. Whilst this doesn’t scream value to me, I could understand why so many investors want a part of this extremely defensive business.

Telstra Corporation

Telstra, also an infrastructure owner, is a first-class blue-chip stock which, for the right price, could be held for a very long time with ease. Thanks to its enviable cash flows and commanding lead in a number of lucrative telecommunications markets, it’s also doing what many investors thought it couldn’t: Continuing to grow earnings rapidly.

Despite ridding itself of the extremely profitable copper cable network to the Government’s NBN Co, Telstra is being rewarded with ongoing infrastructure payments and is busy rolling out its growth strategy in Asia. For long-term investors who want a stable dividend income and growing earnings per share, Telstra could be what you’re looking for.

Ten Network Holdings

If you’re waiting for Ten Network’s fortunes to turnaround, consider Warren Buffett’s wise words, “turnarounds seldom turn.” Analysts are forecasting a loss in 2014 and 2015 and the company recently said revenue will be between 3.5% and 4% lower in FY14 compared to the prior period, despite increased viewers.

Don’t sit on your hands and wait

Even if TEN could turn itself turnaround (and I wouldn’t be surprised if it does), why would you bother waiting around for it? Telstra and Transurban are much more stable businesses with growing revenues and earnings and, perhaps best of all, they pay great dividends! 

However they aren't the only ones. Our top analyst recently revealed the name and code of a small-cap GROWTH stock with a 7% grossed-up dividend yield! That's even bigger than Transurban's forecast payout! You can get all the details of this outstanding stock in our (FREE) report, "The Motley Fool's Top Dividend Stock for 2014-2015". Just click here to download your free copy of "The Motley Fool's Top Dividend Stock for 2014-2015" today.

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any of the mentioned companies. 

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