TLS share price in focus
Starting life as a state-owned enterprise, Telstra has gone through many stages to today be Australia’s largest telecommunications company by market share. They provided over 22.5 million retail mobile accounts in 2023.
Telstra is responsible for building and operating telecommunication networks. Revenue comes from a range of activities including fixed broadband, mobile, data and IP, and digital media. The company has also expanded outside of Australia to over 20 countries where it provides services to governments and businesses.
The competitive advantage that Telstra has over competitors lies in its reach and scale, providing coverage to 99.6% of the Australian population and 5G services to over 85%.
QAN shares
Founded in 1921, Qantas is Australia’s largest airline operator, with the biggest fleet, the most international flights, and the widest range of destinations.
The airline operates both domestic and international flights, offers freight services, and manages the popular Frequent Flyer loyalty program.
TLS & QAN share price valuation
One way to have a ‘quick read’ of where the TLS share price is could be to study something like dividend yield over time. This can give us a sense of the stability of the company and whether they can consistently pay out a percentage of profits.
Remember, the dividend yield is basically the ‘cash flow’ to a shareholder, but it can fluctuate year-to-year or between payments. Currently, Telstra Group Ltd shares have a dividend yield of around 4.09%, compared to its 5-year average of 3.62%. In other words, TLS shares are trading higher than their historical average dividend yield. Be careful how you interpret this information though – it could mean that dividends are growing, or it could mean the share price is falling, or both. In the case of TLS, the annual report shows last year’s dividend was greater than the 3-year average, so the dividend has been growing.
Since QAN is more of a ‘growth’ company than an established blue chip, a price-sales ratio might be a more appropriate assessment. This ratio gives us an idea of how the company has historically been valued relative to its earnings, which can indicate if the company is over or undervalued today. The QAN share price currently trades at a price-sales ratio of 0.58x, which compares to its 5-year long-term average of 0.88x. So, QAN shares are trading lower than their historical average. Don’t forget, a simple multiple like this should only be the start of your research. The Rask websites offer free online investing courses, created by analysts explaining things like Discounted Cash Flow (DCF) and Dividend Discount Models (DDM). They even include free valuation spreadsheets! It’s a good idea to use multiple valuation methods to value a share like Qantas Airways Ltd.
