Telstra (ASX:TLS) share price hits 52-week high amid diversification rumours

The telco is reported to be keen on buying the Aussie assets of New Zealand’s largest sustainable electricity generator
The post Telstra (ASX:TLS) share price hits 52-week high amid diversification rumours appeared first on The Motley Fool Australia. –

The Telstra Corporation Ltd (ASX:TLS) share price has set a new annual record.

It comes amid reports in The Australian that the telecommunications giant is looking to purchase Meridian Energy Ltd’s (ASX: MEZ) Australian assets.

At the time of writing, shares in Australia’s largest phone carrier are trading for $4.01 – up 1.13%. Earlier in the day, shares hit an intraday and 12-month high of $4.02. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.17% higher.

Let’s take a closer look at today’s news.

‘Hello operator. Patch me through to diversification, please.’

According to last night’s report, Telstra “is keen to participate” in the auction for Meridian’s Australian electricity assets. The newspaper claims this is to increase its customer base.

Meridian describes the Australian business as a vertically integrated electricity operation, owning 294 megawatts of renewable generation capacity and 150MW of renewable development opportunities. It has a retail business branded Powershop Australia, which delivers electricity to 140,000 customers and gas to 40,000 customers.

The Australian says Telstra will partner with another investor to complete the purchase, if it were successful. It is not the only company rumoured to be interested in Meridian’s Australian assets. French company Engie is also a potential suitor.

The expected price of the assets is about $1 billion. Investors may be keen on this news, judging by the rising Telstra share price.

What are experts saying about Telstra?

As Motley Fool previously reported, Goldman Sachs has slapped a buy rating on the telco. It expects the Telstra share price to hit $4.30 per unit.

The broker is also forecasting fully franked dividends of 16 cents per share through to FY23. After which, it is expecting a long-awaited dividend increase to 18 cents per share in FY24. At current market price, the FY24 dividend yield would be 4.5%.

Telstra share price snapshot

It has been a good month for the Telstra share price, following the release of the company’s full-year results.

Over the past 12 months, the Telstra share price has increased by about 32%. It has outperformed the ASX 200 by about 10 percentage points.

Over 5 years, however, Telstra shares have depreciated 24% compared to the benchmark index increasing about 36%.

Telstra Corporation has a market capitalisation of $47.2 billion.

The post Telstra (ASX:TLS) share price hits 52-week high amid diversification rumours appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Marc Sidarous 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.

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