What happened with Telstra last week?
The post It hasn’t been a great week for the Telstra (ASX:TLS) share price appeared first on The Motley Fool Australia. –
The Telstra Corporation Ltd (ASX: TLS) share price has been a pretty good investment to have for ASX investors in recent months. The telco remains up 28.07% year to date so far, and more than 32% over the past 12 months. It was only last Monday that the shares hit their 52-week high of $4.02 a share.
But the last week has not been so great for the Telstra share price.
After starting out on Monday morning at $4.02 a share (yes, the 52-week high), Telstra ended up finishing the week at a much lower share price of $3.86. That’s a weekly fall of 4.1%. That’s almost as much as what the entire annual dividend is worth at that share price (4.14%).
In contrast, we have seen the S&P/ASX 200 Index (ASX: XJO) have a pretty positive week, putting on an additional 0.3%. So the Tesltra share price underperformed the ASX 200 by around 4.3%.
So what’s behind this seemingly sudden backwards step for the telco?
Telstra share price falls as the telco prepares to pay out
Well, we don’t have to look too far. Telstra’s fall last week was driven by what could possibly be the best reason to have one of your shares go down in value. Remember how we just went through that the last week’s drop was almost as large as the company’s dividend?
Well, the telco happened to go ex-dividend for its upcoming final dividend payment of 8 cents per share on 25 August (Wednesday). That means that investors who buy TLS shares after this date will not be entitled to receive this dividend. That’s why we saw the value of this dividend leave the Telstra share price on Wednesday morning.
This important milestone on Telstra’s 2021 calendar was the centrepiece of the company’s share price performance last week. Although it resulted in the shares dropping, it’s not one too many shareholders will be complaining about.
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 Sebastian Bowen 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.