Telstra Corporation Ltd (ASX: TLS) shares are up 9.04% in January to $3.86 per share. That's a far cry from the Aussie telco's $2.83 valuation at the end of 2018.
But given the strong gains we saw from Telstra in 2019 and the start of this year, is there still good value in buying today?
Why Telstra is having a bullish run
There's no doubt that the Aussie telco has had its fair share of troubles in recent years. The introduction of the nationwide national broadband network (NBN) has hit Telstra's profits hard.
The government-backed NBN Co. has almost monopolised the fixed broadband market and eaten into Telstra's profits in a big way. These lower earnings have also translated into lower payouts to shareholders.
Telstra's dividend policy was famous for paying out nearly 100% of its profits to shareholders. However, that has since been slashed under the guidance of CEO Andy Penn who has looked to stabilise and pursue internal growth strategies with that cash.
And we can see what's happened to Telstra shares in the process. In the last 5 years, the Aussie telco's share price has plummeted 41.43% lower.
However, Telstra still remains a strong ASX dividend stock with a 2.59% yield and some recent capital growth.
The key has been optimism around Telstra's 5G network and a lot of unhappy customers with the NBN. Rival TPG Telecom Ltd (ASX: TPM) is still waiting to hear from the courts if its merger with Vodafone Hutchison Australia will go through.
To try and help get the merger through, TPG abandoned its plans for a 5G network of its own. That has left Telstra in the box seat to continue its expansion and establish dominance in the sector.
Telstra shares have responded and climbed higher in the last 12 months, but when will the growth stop?
Should you still buy Telstra shares?
Despite its troubles in recent years, it looks like Telstra could be finally turning things around. The dividend yield is still high for an ASX 20 stock with some real growth prospects in the next 5 to 10 years.
I see buying Telstra shares as a real bet on the success of 5G in Australia. There are still rivals waiting to pounce, including Optus and potentially TPG-Vodafone.
The shares aren't too expensive at 21.3 times earnings which could mean now is a good time to get in ahead of a 5G boom.
