3 reasons to hold Telstra Corporation Ltd now

Telstra Corporation Ltd (ASX:TLS) offers more than just dividend yield.

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Shareholders in Telstra Corporation Ltd (ASX: TLS) have enjoyed stellar investment returns over recent years.

In fact, in the past five years an investment in Telstra has returned 89% in capital gains and a further 42% in dividends, fully franked no less!

Unfortunately, at over $6.30, Telstra shares don't appear cheap; so buying now probably isn't a great idea.

Fortunately for shareholders with a view to the long term (five years or more), there appears to be more reasons to keep holding Telstra shares, 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 2015 and beyond.

  1. Interest rates are tipped to reach just 2% in 2015. Lower interest rates will have some obvious effects on the sharemarket. In particular shares with fully franked dividends are likely receive a boost to their market prices as their yields become more attractive, relative to term deposits and savings accounts.
  2. A fully franked yield of 4.7%. Long-term shareholders (who are likely to have purchased at a price lower than today's) will receive a fully franked dividend equivalent to at least 4.7% in the next year. Grossed-up that's a yield of 6.7%!
  3. Steady growth over the long term. Telstra's ambitious Asian strategy and positioning of its Mobiles and Network Application Services divisions will likely lead to solid long-term growth. Although revenue growth will likely be in the low-single digits this year, shareholders can look forward to the prospect of further capital gains over the long-run.
Motley Fool Contributor Owen Raszkiewicz has no financial interest in any of the mentioned companies. You can follow Owen on Twitter @ASXinvest.

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