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Telstra Corporation Ltd, Slater & Gordon Limited and QBE Insurance Group Ltd: Should you buy?

With a total of 2,192 stock listings on the ASX in June 2014, it’s impossible for any individual investor to keep abreast of all the markets news. Even trying to cover the biggest companies included in the S&P/ASX200 Index (INDEXASX: XJO) is more than a good-sized team of analysts can handle.

Three companies many Australians know and trust are Telstra Corporation Ltd (ASX: TLS), Slater & Gordon Limited (ASX: SGH) and QBE Insurance Group Ltd (ASX: QBE). Here’s (briefly) what you need to know about each.

Telstra Corporation

As our biggest telecommunications company, Telstra has a lot to offer long-term investors. However, the company is currently in a state of transformation. It is moving away from legacy businesses, which have rewarded it with enviable operating margins, into more the agile technology/telecommunications markets such as cloud computing, unified communications and digital media. Today’s announcement of an increased stake in US video steaming service Ooyala, exemplifies this.

However, despite an expansion into Asia and a juicy 5.3% fully franked dividend, Telstra shares don’t come cheap. At over $5.40 per share, I think it deserves a ‘Hold’ rating and is not a buy.

Slater & Gordon

Today, Australia’s biggest personal injury law firm, announced an exceptional set of FY14 full-year results which included a 40% increase in revenues, NPAT growth of 47% and 21% increase to its dividend payment. Its future outlook was equally impressive because it announced the acquisition of two more law firms (one from Queensland and one from Victoria) which will be funded via cash and equity and noted the UK expansion was tracking along very nicely. In my opinion, Slater & Gordon remains a solid long-term buy.

QBE Insurance Group

Investing in insurance stocks is not easy. It requires a lot of confidence in management teams to set the right prices, strong balance sheets and meticulous growth strategies. Once you add in natural disasters, it’s easy to see how the valuation process becomes very complex. That’s why, if you intend to buy an insurance stock, a long-term investment timeframe is essential. I believe the worst of QBE’s former management’s ‘growth at all costs’ strategy is now behind it. Whilst it will be a bumpy ride, I believe now could be a good time to take a position. I got myself some exposure just last week.

Buy, hold or sell?

Telstra’s one of my favourite blue-chips but it doesn’t come cheap. However Slater & Gordon and QBE Insurance Group are, in my opinion, worthy additions to long-term investors’ portfolios at today’s prices.

However, since I already own each of them (see my disclosure below), I’m in the market for other BIG dividend stocks. And I think I’ve found one!

It's a cheap and growing small-cap ASX stock with a 7% grossed-up dividend yield which I think is a standout buy today, even for risk-averse investors! Our top analyst dubbed this ultra-promising small-cap, "The Motley Fool's Top Dividend Stock For 2014 - 2015". Best of all: You can get the name and code of this ultra-promising stock for free! Siimply click here to download your free copy of "The Motley Fool's Top Dividend Stock for 2014-2015" today.

Motley Fool Contributor Owen Raszkiewicz owns shares of Slater & Gordon and has May 2018 $8.60 Call Warrants in QBE Insurance Group. 

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