Take a fresh look at Telstra as an income stock

Clime Investment Management

Clime Investment Management

Last April, we said Telstra was a stalwart of local share portfolios but investors should take a fresh look at it as an income stock. The shares have since rallied 24% from $5.08 to $6.29, and income investors may now be asking whether Telstra is too expensive. Telstra is highly profitable, so the solid yield will continue to sustain the stock with more cuts to interest rates likely. Telstra's management also indicated its dividend reinvestment plan (DRP) would start again for the first time since 2008, taking effect from the 2015 final dividend. This is disappointing because it increases the number of shares on issue and slows dividend growth. At $6.29, Telstra is trading slightly above our valuation of $6.08, but the stock's reputation as a yield play is likely to grow. Read more: (VIEW LINK)


Clime Investment Management
Funds Management & Stock Research
Clime Investment Management

The Clime Group is a respected and independent Australian Financial Services Company, which seeks to deliver excellent service and strong risk-adjusted total returns, closely aligned with the objectives of our clients.

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