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Why the Telstra share price just hit a 52-week high to climb 38% in 2019

The Telstra Corporation Ltd (ASX: TLS) share price hit a 52-week high of $3.84 today and is now up around 38% over just 2019. It’s also up 10% over the past one-month period that included a benchmark cash rate cut from the Reserve Bank of Australia that is probably encouraging yield hunting SMSF or ‘mum and dad’ investors to buy the shares. 

The telco is also in the middle of a radical cost cutting program, which it is accelerating in a move that has recently pleased investors.

Another factor likely supporting the share price is the May 8 decision of the ACCC to block the proposed merger between two of Telstra’s main rivals in TPG Telecom Ltd (ASX: TPM) and Vodafone Australia.

Since May 8 Telstra shares have climbed 16% as the blocking of the merger means it’s certain to face less competition in the key mobile space as neither TPG or Vodafone alone have the eye-watering sums of capital required to build out 5G mobile networks. 

Based on trailing 12 month dividend payments of 19 cents per share the stock yields 4.9% at a price of $3.84, which is low on a historical basis. Today’s investors then need to be confident the telco will not have to cut its dividend again in the near future.

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Motley Fool contributor Tom Richardson owns shares of TPG Telecom Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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