Should you bet on Telstra Corporation Ltd for 2015?

It looks like some stocks can keep climbing and ignore the relatively flat gains of the S&P/ASX 200 Index (ASX: XJO) (Index: ^AXJO).

Telstra Corporation Ltd (ASX: TLS) is near new 52-week highs. The telecom giant is coming off of solid earnings growth in FY 2014, but what can investors expect from it in 2015?

Investors should be looking for growth catalysts that can propel the company and its stock to higher levels. Telstra has three parts in its growth story.

Asian expansion

Australia’s population is about 23 million people, yet just on our doorstep are many times more people in South East Asia. The growth opportunities are big for a technologically advanced telecom company like Telstra. In its recent investor day presentation, the company showed that many emerging countries in Asia still are only up to 2G mobile networks. It plans to put its multi-billion dollar war chest towards acquisitions and development in the region to expand its footprint and work with locally established telecoms.  The company projects that as much as a third of revenue will come from its growing Asian business by 2020.

telstra asia growth potential graphic

Source: Telstra Investor Day presentation

e-health development

Combining healthcare and data management, the company has created a new division called Telstra Health. It sees great growth potential for this business which allows medical professionals and patients to work together online to monitor, test and analyse health and fitness. Health tests and results can be managed in real-time, improving the quality of medical services. Telstra thinks that this could be one of its top revenue generators within five years.

Business enterprise and cloud network application services

Telstra is seeing some of its biggest percentage growth in its Network Application Services (NAS) business that deals in cloud computing and business enterprise services. More companies want to do business in the cloud and Telstra plans to be a leading player in the Asia-Pacific region. Telstra recently acquired the Silicon Valley-based Ooyala, a streaming video distribution and platform monetisation company. This is to beef up its data analytics for cloud applications and it has uses for its e-health doctor/patient communication as well.

All three of these growth catalysts are going to take time to develop. Consensus earnings growth forecasts are flat to a little on the down side as it implements these new businesses. As such, there may not be many immediate big jumps in earnings. The stock does pay a big 5.2% yield fully franked, so I would see it as more of a mid to long-term investment that investors can build a position in slowly.

Telstra could be a good yield stock until the growth begins to roll in, but for those investors who want higher growth now, I would suggest the company that our top analysts hand-picked as their top pick for 2015. (Hint: It's a sexy ASX tech company!)

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Motley Fool contributor Darryl Daté-Shappard does not own shares in any company mentioned. 

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