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Should you buy Telstra Corporation Ltd shares?

One of the biggest disappointments on the share market last year was the performance of the Telstra Corporation Ltd (ASX: TLS) share price.

The telco giant finished the year with a share price decline of over 27% largely on the back of it decision to slash its dividend in FY 2018.

Should you buy Telstra shares?

I think that Telstra is well worth considering as an investment option today, especially in this low interest rate environment.

Due to its share price decline, Telstra’s proposed dividend of 22 cents per share works out to be a fully franked 6% yield.

This is not only far better than anything on offer from savings accounts and term deposits, but is also well ahead of the market-average.

Furthermore, I am optimistic that the company will be able to maintain this payout for at least the next two to three years. After which a lot will depend on how successful Telstra is at filling the gap in its earnings caused by the completion of the NBN rollout.

In light of this, I would pick Telstra ahead of rivals TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC) at this point.

Overall, Telstra may have had a nightmare 2017, but I expect 2018 to be a much more positive experience for its shareholders.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended 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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