For dividends, it's hard to go past Telstra Corporation Ltd (ASX: TLS).
A 28-cent fully franked payment, backed by huge cash flows, has been a standard feature of the telco giant for many years, that is, until it increased the payout in 2014.
And in 2015 it's expected to distribute 30 cents per share.
But its ultra-reliable dividend yield isn't the only reason shareholders can be optimistic about holding the stock over the long-term.
Telstra's strong push into Asia, epitomised by the recent acquisition of subsea cable owner Pacnet for $US697 million, holds significant growth potential.
Telstra CEO David Thodey said the company intends to draw one third of revenues from Asia by 2020. Pacnet would double its exposure to the region, according to Bank of America Merrill Lynch analyst Sameer Chopra.
Its push into Asia is well timed.
Indeed the government's NBNCo is set to take control of Telstra's 100-year old copper cable networks for its fibre optic rollout. This will reduce the telcos extremely lucrative right to charge rivals such as iiNet Limited (ASX: IIN) and Optus – owned by Singapore Telecommunications Ltd (CHESS) (ASX: SGT) – to access its infrastructure.
However, Telstra's leading position in wireless networks, such as mobile and the recent nationwide Wi-Fi rollout, means it is likely to remain Australia's dominant telco for some time yet.
Buy, Hold or Sell?
If you're in the market for reliable high-yielding dividend stocks, Telstra should be at the top of your list. However at today's price of around $6.00 per share, it's no bargain. Therefore prudent long-term investors are advised to hold-off entering the stock, for now.
