It was a positive day for the Telstra Corporation Ltd (ASX: TLS) share price on Monday.
The telco giant’s shares finished the day over 2% higher at $3.32.
This means the Telstra share price is now up 4.5% since the release of its half year results last week.
Three reasons the Telstra share price is climbing higher
The first reason the Telstra share price is pushing higher is its dividend.
Although there had been a number of hints that the company would maintain its dividend this year, some investors appeared to doubt this. Which is understandable given the downward trajectory its dividend has taken in recent years.
However, last week Telstra maintained its fully franked interim dividend at 8 cents per share and reiterated plans to do the same with its final dividend. This will mean a fully franked 16 cents per share dividend, which equates to a 4.8% yield.
The second reason
A second reason the Telstra share price is ascending is its positive outlook.
After years of earnings declines caused largely by the NBN rollout, the company is now setting itself growth targets once again.
CEO Andy Penn appears confident that the company is positioned to return to growth in FY 2022. He said: “I am confident the many initiatives we have taken under our T22 program, particularly in simplifying the business and the digitisation program, will further improve customer experience.”
“To get the real benefits from all the effort we’ve already made, Telstra needs to be bold. I’ve set an aspiration for mid to high single-digit growth in underlying EBITDA in FY22 and $7.5 to $8.5 billion of underlying EBITDA in FY23. I am confident we can deliver this if we remain focused,” he added.
The third reason
A third reason for the solid performance by the Telstra share price is the positive response to its results by brokers.
For example, analysts at Goldman Sachs retained their buy rating and lifted their price target on Telstra’s shares to $4.00.
Elsewhere, UBS retained its buy rating and $3.70 price target and Credit Suisse held firm with its outperform rating and $3.85 price target.
It is also worth noting that analysts at Macquarie briefly put an outperform rating and $4.00 price target on its shares before suspending coverage due to research restrictions. The broker is helping Telstra with its TowerCo sell-down.