Insights

Is the Telstra share price (ASX:TLS) a buy today?

Telstra Corporation Ltd (ASX:TLS) shares continue to stay in the doldrums, despite a 5G rollout. Is the Telstra share price a buy today?
The post Is the Telstra share price (ASX:TLS) a buy today? appeared first on The Motley Fool Australia. –

group of young people standing against red wall using their smart phones

The Telstra Corporation Ltd (ASX: TLS) share price continues to dwell in the doldrums. Telstra shares are going for $3.12 a share at the time of writing. At that share price, Telstra is up 3.8% year to date, but down 7.5% over the past 12 months, and down a nasty 40% over the past 5 years.

And we won’t even get into the $7-something price tag Telstra’s T2 tranche floated at back in 1999.

So what’s going on with Telstra shares? And (perhaps more importantly), is the Telstra share price a buy today?

Stability comes at a price

As a telco, there is a lot to like about Telstra on paper. It has an extremely robust and inelastic earnings base, given that in this modern age, customers would probably think hard about choosing between their mobile phone and internet data and almost anything else if push came to shove.

This was evidenced last year by the fact that Telstra kept its dividends steady in a year that saw dividend carnage across many of the ASX’s blue-chip shares.

Speaking of dividends, the company’s shareholder payouts arguably remain its crown jewel. Telstra paid out 16 cents in dividends last year, a level management has already committed to backing up again in 2021. Those consist of 10 cents in ordinary dividends. In addition, the remaining 6 cents in special dividends come from NBN-related payments.

On the current share price, that gives Telstra a forward dividend yield of 5.13%, or 7.33% grossed-up with Telstra’s full franking.

However, Telstra has been struggling in recent years with the ongoing NBN rollout. In its earnings report that the company delivered last month, Telstra reported that its earnings before interest, tax, depreciation and amortisation (EBITDA) fell by 14.7% to $4.1 billion.

Saying that, Telstra also reported that its 5G rollout is going well. It now has the largest 5G network in the country, with more than 50% of the population now covered. 75% of the population is set to be covered by June 2021. That arguably bodes well for Telstra if 5G adoption continues to accelerate (5G margins are a lot better than NBN margins for the company).

Telstra’s T22 cost-cutting program is also back on track after being a COVID-necessitated pause last year. 80% of its cost-cutting metrics are now on schedule or completed.

Is the Telstra share price a buy today?

One broker who thinks the Telstra share price is a buy today is Goldman Sachs. According to CommSec, Goldman rated Telstra shares a ‘buy’ last month, with a price target of $4 a share. That implies an upside of more than 28% on today’s share price (not even including dividends).

On the current Telstra share price, the company has a market capitalisation of $37.05 billion, and a price-to-earnings (P/E) ratio of 20.9.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Is the Telstra share price (ASX:TLS) a buy today? appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!