If you ask any ASX investor what the most interesting share on the S&P/ASX 200 Index (ASX: XJO) might be, I'd wager that Telstra Corporation Ltd (ASX: TLS) wouldn't come up. Telstra is one of the bluest blue chip shares on the ASX. But this mature telco might be described as 'boring' by many investors.
This is understandable. The Telstra share price has been remarkably stable in recent years. In fact, you could have picked up Telstra shares for a similar price today to way back in early 2018.
But I still hold Telstra shares. And I don't plan on getting rid of them any time soon.
Why? Well, it's not because I think Telstra shares are boring for one. Sure, the telco might be stable, far more stable than many other ASX blue chip shares, for that matter. But I don't think that makes a company boring. Quite the contrary.
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Why I still hold 'boring' Telstra shares
The fact is that Telstra is an incredibly dominant company in its sector. It carries a brand that is a relic of a bygone era when Telstra was the government-owned monopolistic provider of almost all telecommunications services in the country. I think this is a good thing, as customers arguably still assign a certain premium to the Telstra brand as a result.
Telstra is by far the market leader when it comes to both mobile and fixed-line internet services in this country. It's also well-known for having the widest service coverage. Many customers are forced to use Telstra due to a lack of alternatives.
Further, the services that Telstra sells are incredibly inelastic in our modern age. How bad would a recession have to be before customers give up their home internet, phones or mobile data plans?
So we have a highly recession-resistant company that is dominant in its sector. Boring? I don't think so.
I was fortunate enough to pick up Telstra shares back when the company was trading well under $3 a share. As such, I continue to enjoy a dividend yield of well over 6% on my original capital, plus the franking, of course.
Remember, this is a company that continued to maintain its dividend through the COVID-ravaged years of 2020 and 2021. Telstra then raised its dividend for the first time in years this year as well, further adding to my returns.
So some investors may find this company boring. But I'm certainly not put to sleep by the returns I have had and continue to enjoy from Telstra. I might sell Telstra one day if its share price gets to a silly level. But until then, I will happily sit pretty and watch the dividends keep rolling in.
