Is Telstra an ASX 200 share worth owning right now?

Could Telstra Corporation Ltd (ASX: TLS) be one of the best ASX blue-chip shares to own?

The telco is certainly one of the biggest businesses in the S&P/ASX 200 Index (ASX: XJO) with a market capitalisation of $45 billion, according to the ASX.

But simply being a large business doesn't mean it's a good option. There is more to it than that.

The prospect of growing earnings could be one of the more important things to look for. Let's start with the prospect of profit rising.

T25 strategy

Telstra is just finishing up its T22 strategy, and now it's going to work on its T25 strategy for the next few years.

The thought is that Telstra's T25 strategy will deliver "growth, exceptional customer experiences and continued network and tech leadership".

The blue-chip ASX share expects to achieve a compound annual growth rate (CAGR) of mid-single digits for the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to FY25. Telstra is also expecting a high-teen CAGR of underlying earnings per share (EPS) to FY25.

Part of that growth will come from the plan to reduce net fixed costs by another $500 million between FY23 and FY25.

Telstra also plans to 'win' with 5G by expanding its 5G network coverage to 95% of the population. Australian-based contact centres will support this expansion.

The company expects 80% of all mobile traffic to be on 5G by FY25. It's already thinking about 6G, saying early planning will "clearly" be on the agenda by the end of T25.

Dividends

One of the things that many Aussies seem to want from their ASX blue-chip shares are dividends.

Telstra has committed to maximising its fully-franked dividends for shareholders and looks to grow them as cash flow, profit, and franking credits allow.

The telco has continued to pay an annual dividend of 16 cents per share, which translates into a grossed-up dividend yield of 5.9%.

Diversification

Some businesses have multiple earnings streams rather than having all the profit 'eggs' in one basket.

While Telstra earns most of its profit from providing telecommunications services in Australia, it is growing in other areas.

It is increasing its earnings presence in Asia (including the acquisition of Digicel Pacific). That deal made the ASX blue-chip share a leading provider of telecommunication services across Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu.

The business also has growing exposure to healthcare with its Telstra Health division. It expanded this by buying MedicalDirector.

Is the Telstra share price a buy?

The broker Morgan Stanley certainly thinks so, with a buy rating on the telco. The price target is $4.60, implying a possible rise of around 20% over the next year.

Morgan Stanley thinks that the success achieved by international peers with fixed wireless broadband is a good sign for Telstra. Fixed wireless comes with a higher profit margin than a connection through the NBN (National Broadband Network).

Just before midday on Wednesday the Telstra share price is climbing by 1.16% to $3.92.