Telstra (TLS)

By Jason Fittler

Telstra Corporation reported net profit after tax, up 12% to $3.81bn for the year ended 31 June 2013.

Revenues from ordinary activities were $25.68bn, up 1.2% from last year.

Diluted earnings per share were 30.6 cents compared to 27.4 cents last year.

Net operating cash flow was $8.36bn compared to $9.28bn last year.

The final dividend declared was 14 cents, taking the full year dividend to 28 cents compared with 28 cents last year.

The group expects growth to continue in financial year 2014 and forecasts low single digit total income and EBITDA growth, with free cash flow between $4.6bn and $5.1bn.

The group expects capital expenditure to be around 15% of sales as it continues to build out its 4G mobile network. TLS gained 0.12 points or 2.40% on the back of the announcement taking the price to $5.13.

At the current level Telstra is trading above our intrinsic value of $4.30 which provide an issue if you currently hold Telstra.

The company is paying a gross yield of 7.8% at the current price and well over 10% at the price most clients paid for the company.

The dividend per shear is expected to increase in the coming years. 

Back in 2011 this company was trading at $2.60, so owners of the stock have made a considerable gain. 

As such most are holding Telstra with a good gain and a high dividend yield.

If overweight, the company you may look to take part profits.

I am comfortable holding for the dividend and possible long-term upside as Telstra may transform its business model.

For more information on Telstra (TLS) please contact us on 07 4771 4577.