Telcos at 20 paces: Telstra Corporation Ltd vs.TPG Telecom Ltd and Vocus Group Ltd

It’s been a tough time for telco investors recently, with the Telstra Corporation Ltd (ASX:TLS) share price, TPG Telecom Ltd (ASX:TPM) share price and Vocus Group Ltd (ASX:VOC) share price all falling meaningfully over the past 12 months.

Which came as a shock — it was hard to find a more popular and more profitable sector over the prior five years. We were all signing up to more plans, making more calls and using more data. And the laws of supply and demand — when the former was tight and the latter plentiful — meant happy days for telco owners… especially when the flurry of mergers and acquisitions continued apace.

And then the music stopped.

Oh, not the growth in consumption: that has continued unabated. But we’re all getting more for either the same or less. And there are simply fewer new contracts being signed. The go-go years seem to be over, and shares fell from stratospheric levels.

Happily, at Motley Fool Share Advisor we sold TPG and Vocus before the rot really set in. Indeed, we rebought one of them just recently at much lower prices.

And we’ve liked Telstra all along, even if the past 6 months haven’t been kind, share-price wise.

The telcos won’t grow like topsy from here on in, but that doesn’t make them bad investments. In fact, three of our services here at The Motley Fool have waded into the telco space again recently.

And dividends make the journey a little smoother, including the likes of this company you should check out.

A Big, Fat, Fully Franked Dividend

This company's dividend is almost the stuff of legends. Since it started paying dividends in 2007, it has increased its payout to shareholders every single year, a run that includes 21 consecutive dividend increases.

Based on the last 12-months of dividends, its shares are currently offering a fully-franked 4.8% yield, which grosses up to almost 7% when those franking credits are included. And in stark contrast to the likes of Commonwealth Bank and Telstra, this company just increased its dividend by over 13%, and guided for 2017 profits to grow by 20%!

Discover the name of this "new breed" of blue chip along with 2 others in our new FREE report "The Motley Fool's Top 3 Blue Chips Stocks For 2017."

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Motley Fool contributor Scott Phillips (TMFGilla) has no position in any stocks mentioned. The Motley Fool Australia owns shares of Telstra Limited, TPG Telecom Limited, and Vocus Communications Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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