This telco giant is having a great month…
The post August has been a great month so far for the Telstra (ASX:TLS) share price appeared first on The Motley Fool Australia. –
Since the start of August, the telco giant’s shares have risen 5%.
As a comparison, the S&P/ASX 200 Index (ASX: XJO) has recorded a 1% gain over the period.
Why is the Telstra share price outperforming this month?
Investors have been bidding the Telstra share price higher this month after the market responded positively to the release of its full year results.
In case you missed it, for the 12 months ended 30 June, Telstra reported an 11.6% reduction in total income to $23.1 billion and a 9.7% decline in underlying EBITDA to $6.7 billion. The latter was within the company’s guidance range of $6.6 billion to $6.9 billion.
This allowed Telstra to maintain its fully franked 16 cents per share dividend.
Also giving the Telstra share price a big lift was its announcement of a major share buyback.
In respect to the former, the company has decided to return $1.35 billion to shareholders via an on-market share buyback. This follows the recent InfraCo Towers transaction.
Telstra CEO, Andy Penn, commented: “When we launched T22, we committed to establishing a standalone infrastructure business unit for three reasons: to give transparency of those assets, to bring a harder commercial edge to how we operationalise them, and to create optionality with a view to maximising shareholder value. This share buy-back is a clear demonstration of how we are creating additional long-term value for our shareholders.”
Finally, arguably giving the Telstra share price the biggest boost was its outlook commentary.
Mr Penn said: “We are clearly building financial momentum and I am very pleased to be able to say that our underlying business will return to full-year growth in FY22. We have confidence because we see strong performance in our mobile business, continued discipline on our cost reduction target, green shoots in some of our growth businesses and a diminishing impact from the nbn.”
Telstra is guiding to underlying EBITDA of $7 billion to $7.3 billion in FY 2022. This represents year on year growth of 4.5% to 9%.
The Telstra share price is now up 32% in 2021.
The post August has been a great month so far for the Telstra (ASX:TLS) share price appeared first on The Motley Fool Australia.
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How does the Telstra (ASX:TLS) dividend compare to its sector?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.