The share price of dividend darling, Telstra Corporation Ltd (ASX: TLS), continues to increase despite a soft opening from the S&P/ASX 200 Index (ASX: XJO) (INDEXASX: XJO) this morning. But with shares sitting near multi-year highs, is it the right time to be buying? Or should you be selling?
Taking a step back from the market's valuation, it's easy to why Telstra is at the top of investors' watchlists. With everything from your fridge to your car now able to be connected to the internet, data consumption is set to rise dramatically. It's not just demand for Telstra's smart phones and tablets which are booming.
Business networking, cloud computing, unified communications and an Asian strategy each afford the company very promising growth prospects in the medium term. Whilst overseas expansions can present a number of risks Telstra has, in recent years, proven it has the ability to identify and form key international partnerships and deliver on its promises.
However, zooming in again, with Telstra shares currently changing hands at over 17 times earnings per share and a book value over 5.3, its future potential appears to be fully baked into the current price. As such, I'd rate Telstra shares a hold, that is, not a buy at today's prices.
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