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Should you buy Telstra Corporation Ltd?

Shares in telecommunications giant, Telstra Corporation Ltd (ASX: TLS), again opened lower this morning, as the broader market sell-off continues.

In the past month alone Telstra shares have fallen 5%, following the S&P/ASX 200 (INDEXASX: XJO) which is down 6.7%.

So is now the time to buy some Telstra stock for yourself or should you get out before it falls even further?

It’s important to understand that no one knows where the company’s share price is going in the short-term. Indeed, its recent falls could be in response to any number of things, such as the prospect of rising US interest rates, a lower AUD or simply, volatility.

However, over the long-term, Telstra has a number of growth prospects which could make it a great investment, at the right price.

For example, the company continues to dominate the local mobiles market and is continually benefitting from the rise of data usage and is best placed for a rise in machine-to-machine (M2M) communication.

The Network Application Services (NAS) division is also taking off, as cloud computing and unified communications displace legacy technologies. Revenues from NAS have grown rapidly in recent years.

Lastly, Telstra’s International division will be a key growth driver for the group’s top and bottom line in the coming decade, if it can continue to expand it partnerships with companies throughout Asia.

So is it priced to buy?

At around $5.30 per share, Telstra offers a 5.6% fully franked dividend – an oasis in the current low interest rate environment. However, at today’s prices, it’s not a compelling buy. As such I’m waiting for a lower price (well below $5.00 per share) before hitting the buy button.

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

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