It's dividend payday for Telstra Corporation Ltd (ASX: TLS) investors today – here are some ideas on how to invest that extra cash for further portfolio growth in 2019.
How much is Telstra paying out in dividends?
Telstra is currently paying a fully-franked dividend of 8 cents per share (cps), which consists of a 5 cps ordinary dividend and 3 cps special dividend.
The company has been forced to overhaul its famous dividend policy in recent years and slashed its interim dividend by 27% after its half-year profit fell by the same percentage to $1.2 billion in August.
So, what's the best use of that Telstra dividend as we enter the second quarter?
Should you double down on Telstra shares?
Telstra has announced a dividend reinvestment plan (DRP) price of $3.17601 per share, which represents a 4% discount on its current $3.31 valuation.
Personally, I think Telstra shareholders are in for a tough time before things get better for Australia's largest telco.
While the company does have a few things going for it, including a strong position for 5G network expansion after the withdrawal of TPG Telecom Ltd (ASX: TPM) and the potential for higher margins if the TPG / Hutchinson Telecommunications (Australia) Ltd (ASX: HTA) merger receives ACCC approval, I think the headwinds are still too strong.
The NBN headache continues for the company and despite cost-cutting and efficiency initiatives, I think we could see the share price fall even further in the next 6-12 months.
What other options are out there?
There are two trains of thought here depending on how bullish you are on the economy and the old value vs. growth debate.
For yield-seeking Fools, I'd suggest taking a look at Alumina Ltd (ASX: AWC) given the strong supply factors for the company while Air New Zealand Ltd (ASX: AIZ) is also looking like a buy with its 9% p.a. unfranked yield ahead of possible franking credit changes.
For growth investors, I think the Altium Ltd (ASX: ALU) share price still has more in it this year while the likes of sports analytics company Catapult Group International Ltd (ASX: CAT) could be a bargain at $0.99 per share.
Finally, for those who are willing to look outside of traditional industries, this top-rated stock in a booming industry could a handy portfolio pickup to unlock some serious capital gains in 2019.
