Would I buy Telstra shares with $5,000 as they near a 52-week low?

The dividend and defensive qualities stand out to me.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Telstra Group Ltd (ASX: TLS) is one of those businesses I think can suit investors looking for steady long-term returns rather than excitement.

With the shares trading close to their 52-week low, I think the current price deserves a closer look.

If I had $5,000 to invest today, I would be comfortable putting it into Telstra shares.

Two male ASX investors and executives wearing dark coloured suits sit at a table holding their mobile phones discussing the highest trading ASX 200 shares today

Image source: Getty Images

The income case is still strong

Telstra shares are trading around $4.60.

According to CommSec, analysts expect fully franked dividends per share of 22 cents in FY27 and 22.5 cents in FY28.

That puts the forward dividend yield at roughly 4.8% in FY27, before taking franking credits into account.

For an investor looking for passive income, I think that is attractive.

More importantly, the dividend is expected to keep edging higher rather than simply remaining flat.

Telstra has made a sustainable and growing dividend an important part of its strategy, and I think its recurring cash flows give it a good base from which to support those payments.

Mobile and internet services are regular household expenses, so Telstra continues receiving revenue from millions of customers every month.

That makes the income case easier for me to understand and gives shareholders a reason to hold the stock through quieter periods.

The business has defensive qualities

I also like Telstra because demand for its core services does not disappear when economic conditions weaken.

People still need mobile phones, internet connections, and access to digital services.

Businesses also rely heavily on telecommunications infrastructure to operate.

Telstra still faces economic pressure, competition, and changing customer behaviour, although I think demand for its services is more resilient than for many discretionary products.

For someone investing $5,000 and looking to hold for years, that stability has real value.

I would be much more comfortable owning a business whose products remain part of everyday life than relying on a company that needs consumers to keep spending freely.

There is still room for modest growth

Telstra does not need strong earnings growth to produce a respectable long-term result.

CommSec forecasts earnings per share of 20.8 cents in FY27 and 21.6 cents in FY28.

That is not explosive growth, but it does point in the right direction.

I think the more interesting part is how Telstra can keep improving the business around its existing customer base.

Its mobile network remains central to the company, while investments in fibre, satellite connectivity, enterprise services, and other infrastructure can create additional opportunities over time.

If Telstra can grow earnings gradually while continuing to increase its dividend, I think shareholders could receive a combination of income and moderate capital growth.

For me, that is enough to make the shares interesting at the current price.

Foolish takeaway

Yes, I would invest $5,000 into Telstra shares at around $4.60.

I like the combination of fully franked income, resilient demand, and the potential for steady earnings growth over time.

For investors seeking income and a relatively defensive long-term holding, I think the current share price looks attractive.

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Communication Shares

Three guys in shirts and ties give the thumbs down.
Communication Shares

SkyCity rejects takeover offers, focuses on strategy and asset sales

SkyCity Entertainment Group has turned down two takeover bids and is reaffirming its commitment to asset sales and operational improvements.

Read more »

A boy holds on tight as his gaming console nearly blows him away.
Communication Shares

This ASX game developer could double in value: Broker

With new game releases in the wings, there could be a surprise in store.

Read more »

A cute little kid in a suit pulls a shocked face as he talks on his smartphone.
Dividend Investing

Looking to bank the boosted Telstra dividend? You better hurry!

Telstra caught the attention of passive income investors with a 10% dividend boost.

Read more »

happy friends playing on phones in park
Earnings Results

Chorus Limited FY26 profit surges as fibre uptake climbs and dividend rises

The NZ telco has released its results this morning.

Read more »

a woman sits at a computer with a satisfied expression on her face in a white room with greenery outside her window.
Communication Shares

Aussie Broadband FY26 earnings: double-digit growth and new acquisitions

Aussie Broadband delivered strong FY26 earnings growth and expanded its portfolio with major acquisitions.

Read more »

A female executive smiles as she carries out business on her mobile phone.
Earnings Results

TPG Telecom shares on watch as earnings and dividend edge higher in HY26

The telco reported a 1% increase in EBITDA to $821 million.

Read more »

A man talking on his mobile phone looks uncertain.
52-Week Lows

Telstra shares hit fresh 52-week low: What's next for the ASX 200 telco stock?

Telstra shares fell further into the red on Thursday.

Read more »

A man wearing a colourful shirt holds an old fashioned phone to his ear with a look of curiosity on his face as though he is pondering the answer to a question.
Communication Shares

Buying Telstra shares? Here's the yield you'll get today

Telstra's dividend yield just went up.

Read more »