TLS share price in focus
Starting life as a public company, Telstra has gone through several stages to become Australia’s largest telecommunications company by market share today. They served over 22.5 million retail mobile accounts in 2023.
Telstra is responsible for building and operating telecommunications networks. Revenue is derived from a range of activities including fixed broadband, mobile, data and IP, and digital media. The company has also expanded beyond Australia to more than 20 countries where it provides services to governments and businesses.
The competitive advantage Telstra has over rivals is its reach and scale, providing coverage to 99.6 per cent of Australia’s population and providing 5G services to more than 85 per cent.
QAN Shares
Founded in 1921, Qantas is Australia’s largest airline operator, with the largest fleet, the most international flights, and the widest range of destinations.
The airline operates domestic and international flights, offers cargo services, and operates a popular frequent flyer loyalty program.
Pricing of TLS and QAN shares
One way to get a ‘quick read’ of where the TLS share price is may be to study something like the dividend yield over time. This can give us an idea of the stability of the company and whether it can consistently pay a percentage of profit.
Remember, the dividend yield is essentially ‘cash flow’ to the shareholder, but it can fluctuate from year to year or between payments. Currently, shares of Telstra Group Limited have a dividend yield of around 3.51%, compared to their 5-year average of 3.62%. In other words, TLS shares are trading below their historical average dividend yield. Be careful how you interpret this information – it could mean that profits have fallen, or the share price is rising, or both. In the case of TLS, the annual report shows that last year’s dividend was higher than the 3-year average, so the dividend is growing.
As QAN is more of a ‘growth’ company than an established blue-chip, the price-to-sales ratio may be a more appropriate valuation. This ratio gives us an idea of how the company has historically been valued relative to its earnings, which can indicate whether the company is overvalued or undervalued today.
QAN shares currently trade at a price-to-sales ratio of 0.61x, which compares to its long-term 5-year average of 0.88x. Hence, QAN shares are trading below their historical average.
Don’t forget, a simple multiple like this should only be the beginning of your research. 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 is a good idea to use multiple valuation methods to value shares like Qantas Airways Ltd.
