The Telstra Corporation Ltd (ASX: TLS) share price will be on watch in the coming period as multiple experts name it their value pick.
Shares for the telecommunications company have already risen almost 29% this year, closing at $3.87 yesterday.
But with the S&P/ASX 200 Index (ASX: XJO) sinking 5.5% over the past few weeks, investors are increasingly looking for 'safe havens'.
Pengana Australian Equities Fund analyst Mark Christensen said this week that Telstra has one large and reliable revenue source.
"Telstra has 25% of their valuation effectively tied up in a long-term bond with the government essentially — it's with the NBN," he told a Pengana webinar.
"[The contract] has a step-up linked to inflation … So if inflation does run away, Telstra benefits by having that income stream also accelerate."
This means that the telco is resilient against inflation and interest rate hikes, according to Christensen.
Expect Telstra's dividends to remain healthy
Ord Minnett senior investment adviser Tony Paterno also likes the look of the Telstra share price for its reliability through some possibly turbulent years.
"Management is targeting mid-single digit growth in underlying operating earnings to fiscal year 2025," he told TheBull.com.au.
"It expects increasing earnings to be driven by mobile service revenue growth, improving consumer and small business fixed margins and further cost reductions."
Paterno forecasts Telstra's fully franked dividends to stay at least at the current level of 16 cents per share.
"Telstra plans to return any excess cash flow to shareholders – in the absence of merger and acquisition opportunities – via an unfranked special dividend, or further on-market share buybacks."
The current dividend yield is 2.58%, although that jumps to more than 4% if all 16 cents, which includes special cash payments, is counted.
Telstra is actually Pengana Australian Equities Fund's largest holding currently.
It's positioning its portfolio to be defensive-dominated for the coming years, expecting hard times for the general market.
"[We're] making sure we've got companies that, at the very least, will not lose in an interest-rate or inflationary environment," said Christensen.
"But more than that, we [aim to] find winners — those that benefit."
