Shareholders in Telstra Corporation Ltd (ASX: TLS) have enjoyed stellar investment returns over the past couple of years.
Indeed since the beginning of 2012, an investment in our largest telco has returned 69% in capital gains and a further 36% in dividends (grossed-up).
Unfortunately, at over $5.60, Telstra shares don't appear cheap; so buying now probably isn't a great idea.
However, for shareholders with a view to the long term (five years or more), there appears to be more reasons to keep holding on. Rather than selling out now and presumably incurring a hefty tax bill when June 30 rolls around.
Here are three reasons why you can consider holding throughout the next year.
- Interest rates are being tipped to go lower in 2015. Lower interest rates will have some obvious effects on the share market and Telstra. For example, many shares – especially ones with fully franked dividends – are likely receive a boost to their market prices as their returns become more attractive relative to term deposits and savings accounts.
- It has a dividend of at least 5.22% fully franked. Long-term shareholders (who are likely to have purchased at a price lower than today's) will be receiving a fully franked dividend equivalent to at least 5.22% in the next year. Grossed-up that's a yield over 7.5%pa – try getting that at the bank!
- Telstra is growing (slowly). With an ambitious Asian strategy and ongoing market dominance in its Mobiles and Network Application Services divisions, Telstra shareholders will be direct beneficiaries of our increasing use of internet-enabled devices and faster internet connections. Whilst revenue growth is expected to be in the low-single digits this year, shareholders can look forward to the prospect of capital gains, over time.
