Much to the relief of its long-suffering shareholders, the Telstra Corporation Ltd (ASX: TLS) share price is heading in the right direction once again.
At the time of writing the telecommunications giant's shares are up 2.5% to $3.71.
Why are its shares higher?
With no news out of Telstra this morning, today's gain is likely to be attributable to a research note out of Credit Suisse.
According to the note, analysts at the investment bank have upgraded Telstra's shares from a neutral rating to an outperform rating.
Furthermore, its analysts have increased the price target on its shares from $3.90 to $4.00.
The broker believes that all the bad news is out of the way and it has now been priced into its shares.
As well as this, Credit Suisse expects Telstra's decision to create a special dividend pool will allow it to maintain a 22 cents per share dividend for at least the next four years.
This is in reference to Telstra's plan to return approximately 75% of the net one-off NBN receipts to shareholders via a fully franked special dividend each year.
Should you invest?
I would agree with Credit Suisse on this one and think Telstra's shares are great value at the current share price.
Furthermore, despite the dividend cut, its shares will provide a generous fully franked 6% dividend in FY 2018. This yield is significantly greater than the market-average of 4.2%.
In my opinion, this puts it just ahead of TPG Telecom Ltd (ASX: TPM) as my preferred pick in the telco space at present.
