Have Telstra shares been a worthwhile long-term investment?
The post If you invested $1,000 in Telstra (ASX:TLS) shares a decade ago, here’s what it would be worth now appeared first on The Motley Fool Australia. –
The Telstra Corporation Ltd (ASX: TLS) share price has recorded strong gains over the past year, up 30%. This comes as Australia’s largest telco provider navigates its way around COVID-19 and the NBN headwind.
Below, we calculate how much Telstra shares would be worth if a shareholder made an investment 10 years ago.
How is the Telstra share price tracking in 2021?
Without a doubt, the Telstra share price has been on fire this year, accelerating by almost 30%.
The company’s mobile division has been a standout performer as Australians continue to work from home. In addition, management’s focus on cutting down costs across the business has had a positive effect on the Telstra share price.
Last month, Telstra shares reached a multi-year high of $4.03, a level not seen since August 2017.
But you may be wondering how much a long-term investor would have made. Let’s take a look…
What would have happened to your Telstra investment in 10 years?
If you invested $1,000 in Telstra shares in 2011, you would have picked them up for around $3.04 each. This would have given you approximately 328 shares without reinvesting the dividends.
Looking at yesterday’s closing price, Telstra shares are trading at $3.85 a pop. This means those 328 shares would now be worth around $1,262.80 (328 shares x $3.85). When considering percentage terms, this implies an increase of 26.28%, or a yearly average return of 2.36%.
However, it’s worth noting this doesn’t factor in the juicy dividends that Telstra pays on a bi-annual basis.
Are Telstra shares a buy?
Since the release of Telstra’s FY21 full-year results, a few brokers have weighed in on the company’s share price.
Australian leading investment firm Morgans raised its price target for Telstra shares by 3.6% to $4.34. Credit Suisse followed suit to also add on its rating by 2.4% to $4.25. The most recent broker note came from JPMorgan, which has initiated a bullish price of $4.40 for the telco’s shares.
Based on the current price, JPMorgan’s 12-month price target implies an upside of roughly 14.2%.
Telstra commands a market capitalisation of roughly $45.8 billion, making it the 11th largest company on the ASX.
Should you invest $1,000 in Telstra right now?
Before you consider Telstra, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Telstra wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
Motley Fool contributor Aaron Teboneras owns shares of Telstra Corporation Limited. 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.