August has been a great month so far for the Telstra (ASX:TLS) share price

This telco giant is having a great month…

| More on:
Two women jumping into the air.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It has been a great month so far for the Telstra Corporation Ltd (ASX: TLS) share price.

Since the start of August, the telco giant's shares have risen 5%.

As a comparison, the S&P/ASX 200 Index (ASX: XJO) has recorded a 1% gain over the period.

Why is the Telstra share price outperforming this month?

Investors have been bidding the Telstra share price higher this month after the market responded positively to the release of its full year results.

In case you missed it, for the 12 months ended 30 June, Telstra reported an 11.6% reduction in total income to $23.1 billion and a 9.7% decline in underlying EBITDA to $6.7 billion. The latter was within the company's guidance range of $6.6 billion to $6.9 billion.

This allowed Telstra to maintain its fully franked 16 cents per share dividend.

Share buyback

Also giving the Telstra share price a big lift was its announcement of a major share buyback.

In respect to the former, the company has decided to return $1.35 billion to shareholders via an on-market share buyback. This follows the recent InfraCo Towers transaction.

Telstra CEO, Andy Penn, commented: "When we launched T22, we committed to establishing a standalone infrastructure business unit for three reasons: to give transparency of those assets, to bring a harder commercial edge to how we operationalise them, and to create optionality with a view to maximising shareholder value. This share buy-back is a clear demonstration of how we are creating additional long-term value for our shareholders."

Improving outlook

Finally, arguably giving the Telstra share price the biggest boost was its outlook commentary.

Mr Penn said: "We are clearly building financial momentum and I am very pleased to be able to say that our underlying business will return to full-year growth in FY22. We have confidence because we see strong performance in our mobile business, continued discipline on our cost reduction target, green shoots in some of our growth businesses and a diminishing impact from the nbn."

Telstra is guiding to underlying EBITDA of $7 billion to $7.3 billion in FY 2022. This represents year on year growth of 4.5% to 9%.

The Telstra share price is now up 32% in 2021.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »

Father in the ocean with his daughters, symbolising passive income.
Dividend Investing

I'd spend $8k on these ASX 200 shares today to target a $6,102 annual passive income

I believe these ASX 200 shares will continue rewarding passive income investors for years to come.

Read more »

Three businesspeople leap high with the CBD in the background.
Share Market News

Boom! ASX 200 blasts to new record highs

ASX 200 investors just sent the benchmark index into uncharted territory.

Read more »