Silly season, page-3

Hi Insomniac – it seems that in broad terms our views on TGA and CCP are similar. I do not have a view on MMS.

It is interesting that TGA's SP ran up nicely today too. Over the last two months the Thomson Consensus Estimates (opinions of CBA Institutional Equities, and Morningstar Australasia) have lifted the EPS estimates for FY2016 and FY2017, so maybe investors are reacting to that. Estimates in recent months are:

YE 30-03-16 .................YE 30-03-17
Median .......... 23.4c ............. 27.4c
7 Days Ago .... 23.3c .............. 27.0c
30 Days Ago .. 22.4c .............. 23.2c
60 Days Ago .. 20.7c .............. 23.4c
90 Days Ago .. 20.7c .............. 23.4c

If the current estimates of 23.4c for FY2016 and 27.4c for FY2017 turn out to be correct, I think the DPS will be 12.75c for FY2016, and 14c for FY2017. That is, TGA may pay 55% in FY2016, rounded down to 12.75c to increase DPS by 1c, and in FY2017 it may reduce the payout ratio to 51.1% to pay 14c, an increase of 1.25c. Since 2007 (and adding the above two estimates) DPS metrics are 1.0c, 4.2c, 4.7c, 6.2c, 8.4c, 9.5c, 10.5c, 11.0c, 11.75c, 12.75c, 12.75c est, 14.0c est.

I corrected the rounded 11.8c to 11.75c, but I did not bother checking what the earlier DPS payments actually were. With these DPS metrics, it's no wonder that I like TGA as a long-term investment. Having held TGA since 2008, I know it well, and so I tend to value it higher than most people because my TGA-specific discount for risk is low.

To go off at a tangent, I expected more to have been said about smartphones and data plans in the EOY presentations, but I do not recall anything said on the matter. The preliminary report mentioned in respect to initiatives, “New propositions including mobile voice and data plans and interest free purchases”. Currently, TGA's website states “Data plan not included”.