Was fwd'd this email and makes for an interesting read...
Telstra is likely to pay a 30c fully franked dividend this year having paid 28c each year for the last 10 odd years. Now see how the lower A$ and the lower interest rates impacts on the value of Telstra.
From an international investor’s point of view the A$ has fallen from 110c to 80c. In effect this has increased the value of Telstra’s 30c dividend by 110/80 which is 37.5%. At the same time the share price of Telstra from an international investor’s point of view is costing 37.5% less. No wonder the stock has tripled since 2010.
Then take on board this little equation. Generally speaking equities have been priced against bonds and have generally speaking commanded (say) a 2% yield premium to bond yields for the risk you take in equities. For instance the average yield on equities is now 4.5% with cash rates at 2.5%. So you can imagine that if interest rates dropped to 1% then the average yield on equities might be expected to drop from 4.5% to maybe 3%.
Now look again at Telstra. If Telstra was on a 3% yield paying a 30c dividend, you can work out the share price. Yes, it’s $10. Telstra’s share price is currently 667c. In other words if interest rates moved to 1.0% and Telstra moved to an average yield the Telstra share price could go up another 47%. And that, just to ice the cake, is from an international investor’s point of view and is before franking. Domestic investors can add franking. That means that at $10 Telstra is still yielding 4.28% when interest rates are 1%. And that is what the market is beginning to anticipate
- Forums
- ASX - By Stock
- TLS
- Telstra $10?
Telstra $10?
-
-
- There are more pages in this discussion • 556 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add TLS (ASX) to my watchlist
|
|||||
Last
$3.85 |
Change
-0.050(1.28%) |
Mkt cap ! $44.54B |
Open | High | Low | Value | Volume |
$3.88 | $3.89 | $3.85 | $42.11M | 10.89M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
146 | 750197 | $3.85 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$3.86 | 551639 | 97 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
140 | 772743 | 3.850 |
50 | 688595 | 3.840 |
37 | 402042 | 3.830 |
33 | 484019 | 3.820 |
25 | 286083 | 3.810 |
Price($) | Vol. | No. |
---|---|---|
3.860 | 471738 | 91 |
3.870 | 388621 | 36 |
3.880 | 459025 | 31 |
3.890 | 298186 | 33 |
3.900 | 585694 | 46 |
Last trade - 14.34pm 25/07/2024 (20 minute delay) ? |
Featured News
TLS (ASX) Chart |