ASX:TLS

Stock Analysis Report

Executive Summary

Telstra Corporation Limited provides telecommunications and information services to businesses, governments, and individuals in Australia and internationally.

Snowflake

Fundamentals

Second-rate dividend payer with imperfect balance sheet.


Similar Companies

Share Price & News

How has Telstra's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.3%

TLS

-0.07%

AU Telecom

0.4%

AU Market


1 Year Return

12.9%

TLS

6.0%

AU Telecom

9.8%

AU Market

Return vs Industry: TLS exceeded the Australian Telecom industry which returned 6% over the past year.

Return vs Market: TLS exceeded the Australian Market which returned 9.8% over the past year.


Shareholder returns

TLSIndustryMarket
7 Day0.3%-0.07%0.4%
30 Day-1.9%-2.0%-1.1%
90 Day-5.8%-4.9%-0.6%
1 Year18.4%12.9%10.0%6.0%16.1%9.8%
3 Year-14.3%-29.0%-15.9%-28.2%36.1%17.9%
5 Year-12.4%-34.9%-11.5%-31.8%49.4%15.7%

Price Volatility Vs. Market

How volatile is Telstra's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Telstra undervalued compared to its fair value and its price relative to the market?

19.74x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: TLS (A$3.58) is trading above our estimate of fair value (A$3.47)

Significantly Undervalued: TLS is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: TLS is good value based on its PE Ratio (19.7x) compared to the Telecom industry average (34.2x).

PE vs Market: TLS is poor value based on its PE Ratio (19.7x) compared to the Australian market (18.2x).


Price to Earnings Growth Ratio

Low PEG Ratio: TLS is poor value based on its PEG Ratio (6.9x)


Price to Book Ratio

PB vs Industry: TLS is overvalued based on its PB Ratio (2.9x) compared to the AU Telecom industry average (2.4x).


Next Steps

Future Growth

How is Telstra forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

2.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TLS's forecast earnings growth (2.8% per year) is above the savings rate (2.3%).

Earnings vs Market: TLS's earnings (2.8% per year) are forecast to grow slower than the Australian market (10.3% per year).

High Growth Earnings: TLS's earnings are forecast to grow, but not significantly.

Revenue vs Market: TLS's revenue (0.6% per year) is forecast to grow slower than the Australian market (3.6% per year).

High Growth Revenue: TLS's revenue (0.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: TLS's Return on Equity is forecast to be low in 3 years time (13.1%).


Next Steps

Past Performance

How has Telstra performed over the past 5 years?

-9.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TLS's earnings have declined by -9.1% per year over the past 5 years.

Accelerating Growth: TLS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TLS had negative earnings growth (-40%) over the past year, making it difficult to compare to the Telecom industry average (-40%).


Return on Equity

High ROE: TLS's Return on Equity (14.8%) is considered low.


Return on Assets

ROA vs Industry: TLS has a higher Return on Assets than the Telecom industry average last year.


Return on Capital Employed

ROCE Improving: TLS's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Telstra's financial position?


Financial Position Analysis

Short Term Liabilities: TLS's short term assets (A$7.3B) do not cover its short term liabilities (A$9.6B)

Long Term Liabilities: TLS's short term assets (7.3B) do not cover its long term liabilities (18.5B)


Debt to Equity History and Analysis

Debt Level: TLS's debt to equity ratio (119.1%) is considered high

Reducing Debt: TLS's debt to equity ratio has increased from 115.3% to 119.1% over the past 5 years.

Debt Coverage: TLS's debt is well covered by operating cash flow (38.6%).

Interest Coverage: TLS's interest payments on its debt are well covered by EBIT (4.6x coverage).


Balance Sheet

Inventory Level: TLS has a high level of physical assets or inventory.

Debt Coverage by Assets: TLS's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

What is Telstra's current dividend yield, its reliability and sustainability?

4.47%

Current Dividend Yield


Dividend Yield vs Market

company4.5%marketbottom25%2.4%markettop25%5.6%industryaverage4.2%forecastin3Years4.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: TLS's dividend (4.47%) is higher than the bottom 25% of dividend payers in the Australian market (2.44%).

High Dividend: TLS's dividend (4.47%) is low compared to the top 25% of dividend payers in the Australian market (5.59%).

Stable Dividend: TLS's dividend payments have been volatile in the past 10 years.

Growing Dividend: TLS's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.2%), TLS's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TLS's dividends in 3 years are forecast to be covered by earnings (85.7% payout ratio).


Next Steps

Management

What is the CEO of Telstra's salary, the management and board of directors tenure and is there insider trading?

3.2yrs

Average management tenure


CEO

Andy Penn (56yo)

4.4yrs

Tenure

AU$5,119,000

Compensation

Mr. Andrew Richard Penn, also known as Andy, MBA (Kingston), AMP (Harvard), BEc, FCCA, HFAIPM has been the Chief Executive Officer, Managing Director and Director of Telstra Corporation Limited since May 1 ...


CEO Compensation Analysis

Compensation vs. Market: Andy's total compensation ($USD3.50M) is about average for companies of similar size in the Australian market ($USD3.86M).

Compensation vs Earnings: Andy's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.2yrs

Average Tenure

Experienced Management: TLS's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

3.5yrs

Average Tenure

59yo

Average Age

Experienced Board: TLS's board of directors are considered experienced (3.5 years average tenure).


Insider Trading

Insider Buying: TLS insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyAU$97,05110 Sep 19
Roy Chestnutt
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares27,000
Max PriceAU$3.59
BuyAU$112,79122 Aug 19
Peter Hearl
EntityIndividual
Role
Member of the Board of Directors
Non Executive Director
Shares30,000
Max PriceAU$3.76
BuyAU$120,32022 Aug 19
Niek van Damme
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares32,000
Max PriceAU$3.76
BuyAU$138,62914 Mar 19
Roy Chestnutt
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares43,000
Max PriceAU$3.22
BuyAU$24,96005 Mar 19
Nora Scheinkestel
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares7,875
Max PriceAU$3.17
SellAU$972,00022 Feb 19
Andrew Penn
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Director
Shares300,000
Max PriceAU$3.24
BuyAU$242,97620 Feb 19
Eelco Blok
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares75,000
Max PriceAU$3.24

Ownership Breakdown


Management Team

  • Andy Penn (56yo)

    CEO, MD & Director

    • Tenure: 4.4yrs
    • Compensation: AU$5.12m
  • Håkan Eriksson (53yo)

    Chief Technology Officer

    • Tenure: 2.7yrs
  • Christian von Reventlow

    Group Executive of Product & Technology

    • Tenure: 0.9yrs
    • Compensation: AU$1.60m
  • R. Howard

    Managing Director of Voice & Convergence

    • Tenure: 14.6yrs
  • Ross Moffat

    Head of Investor Relations

    • Tenure: 0yrs
  • Brendon Riley

    Group Executive & CEO of Telstra InfraCo

    • Tenure: 1yrs
    • Compensation: AU$2.69m
  • Carmel Mulhern

    Group General Counsel and Group Executive

    • Tenure: 7.8yrs
  • Vicki Brady

    CFO and Group Executive of Strategy & Finance

    • Tenure: 0.3yrs
    • Compensation: AU$348.00k
  • Alex Badenoch

    Group Executive of Human Resources

    • Tenure: 3.2yrs
    • Compensation: AU$1.51m
  • Upendra Kohli

    Managing Director of India Operations

    • Tenure: 5.2yrs

Board Members

  • Peter Hearl (68yo)

    Non Executive Director

    • Tenure: 5.2yrs
    • Compensation: AU$294.00k
  • Andy Penn (56yo)

    CEO, MD & Director

    • Tenure: 4.4yrs
    • Compensation: AU$5.12m
  • Craig Dunn (56yo)

    Non-Executive Director

    • Tenure: 3.5yrs
    • Compensation: AU$284.00k
  • NL Scheinkestel (59yo)

    Non-Executive Director

    • Tenure: 9.2yrs
    • Compensation: AU$304.00k
  • Eelco Blok (62yo)

    Non-Executive Director

    • Tenure: 0.7yrs
    • Compensation: AU$88.00k
  • John Mullen (64yo)

    Chairman of the Board

    • Tenure: 3.5yrs
    • Compensation: AU$779.00k
  • Roy Chestnutt (59yo)

    Non-Executive Director

    • Tenure: 1.4yrs
    • Compensation: AU$260.00k
  • Nicolaas John van Damme (58yo)

    Non-Executive Director

    • Tenure: 1yrs
    • Compensation: AU$186.00k
  • Margie Seale (58yo)

    Non-Executive Director

    • Tenure: 7.4yrs
    • Compensation: AU$270.00k

Company Information

Telstra Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Telstra Corporation Limited
  • Ticker: TLS
  • Exchange: ASX
  • Founded: 1901
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: AU$42.541b
  • Shares outstanding: 11.88b
  • Website: https://www.telstra.com.au

Number of Employees


Location

  • Telstra Corporation Limited
  • 242 Exhibition Street
  • Level 41
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TTRA.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDNov 1997
TLSASX (Australian Securities Exchange)YesOrdinary SharesAUAUDNov 1997
TLSNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDNov 1997
TSTADB (Deutsche Boerse AG)YesOrdinary SharesDEEURNov 1997
TLSCHIA (Chi-X Australia)YesOrdinary SharesAUAUDNov 1997
TLSY.YOTCPK (Pink Sheets LLC)FINAL ADS EACH REPR 5 ORD SHS NPVUSUSDOct 1998
TSTDDB (Deutsche Boerse AG)FINAL ADS EACH REPR 5 ORD SHS NPVDEEUROct 1998

Biography

Telstra Corporation Limited provides telecommunications and information services to businesses, governments, and individuals in Australia and internationally. It operates in four segments: Telstra Consumer ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 10:32
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.