Buy Telstra For the Dividend

This story features TELSTRA GROUP LIMITED. For more info SHARE ANALYSIS: TLS

By Michael Gable 

The 2014 financial year is over and the ASX 200 managed to finish 12.4% higher. We are looking forward to another year of low interest rates with consensus estimates picking the market to return 11.5%. The money has been made in the safer high-yielding stocks, and we now need to look beyond this to gain an advantage. Combined with some careful covered call writing for stocks taking a breather, we should have another good year despite an eventual “correction that we have to have”, which may occur at some point. For those treading carefully in the market here, we have identified a couple of opportunities, including in the defensive stock Telstra.
 

Telstra Corporation ((TLS))

TLS has now traded to the bottom of its recent channel and appears to be turning back up again. We may be expecting to see some buying come into TLS here as investors search for another dividend. Because of the 45 day holding rule for franking credits, we looked at the performance of TLS in the 45 days before ex date since the beginning of 2012 and it has risen on average 16c. The average drop on the ex date has been 13c. So with a likely ex div date of 18 August (unconfirmed), and the 45 days prior to that occurring this week, TLS at the bottom of the channel here may be finding support for a run up into the ex dividend date.
 

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Michael Gable is managing Director of  Fairmont Equities (www.fairmontequities.com)

Michael assists investors to achieve their goals by providing advice ranging from short term trading to longer term portfolio management, deals in all ASX listed securities and specialises in covered call writing to help long term investors protect their share portfolios and generate additional income.

Michael is RG146 Accredited and holds the following formal qualifications:

• Bachelor of Engineering, Hons. (University of Sydney) 
• Bachelor of Commerce (University of Sydney) 
• Diploma of Mortgage Lending (Finsia) 
• Diploma of Financial Services [Financial Planning] (Finsia) 
• Completion of ASX Accredited Derivatives Adviser Levels 1 & 2

Disclaimer

Michael Gable is an Authorised Representative (No. 376892) and Fairmont Equities Pty Ltd is a Corporate Authorised Representative (No. 444397) of Novus Capital Limited (AFS Licence No. 238168). The information contained in this report is general information only and is copy write to Fairmont Equities. Fairmont Equities reserves all intellectual property rights. This report should not be interpreted as one that provides personal financial or investment advice. Any examples presented are for illustration purposes only. Past performance is not a reliable indicator of future performance. No person, persons or organisation should invest monies or take action on the reliance of the material contained in this report, but instead should satisfy themselves independently (whether by expert advice or others) of the appropriateness of any such action. Fairmont Equities, it directors and/or officers accept no responsibility for the accuracy, completeness or timeliness of the information contained in the report.

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