Telstra Adds to Capital Management Options with Autohome Sale

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Morningstar

Leading Independent Investment Research

Morningstar, Inc.

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Equity Bottom-Up

For Fiscal 2016, the delivery on guidance was such that the result could be regarded as "boring"--a treasured quality against the volatile economic backdrop. While the final fully franked dividend of AUD 0.155 was shy of our AUD 0.16 forecast, investors should take solace in the confirmation of a AUD 1.5 billion buyback program.What was not "boring" was the decision to increase capital expenditure, from 15% of sales in fiscal 2016 to 18% for each of the next three years. A shortsighted way to look at this is that it precludes further capital management initiatives and points to increasing capital intensity due to growing competition. We, on the other hand, are supportive of this strategy to invest an extra AUD 3.0 billion in Telstra's network infrastructure, to proactively respond to future customer demand in terms of speed, data consumption and product/service.Analyst: Brian Han

For Fiscal 2016, the delivery on guidance was such that the result could be regarded as "boring"--a treasured quality against the volatile economic backdrop. While the final fully franked dividend of AUD 0.155 was shy of our AUD 0.16 forecast, investors should take solace in the confirmation of a AUD 1.5 billion buyback program.What was not "boring" was the decision to increase capital expenditure, from 15% of sales in fiscal 2016 to 18% for each of the next three years. A shortsighted way to look at this is that it precludes further capital management initiatives and points to increasing capital intensity due to growing competition. We, on the other hand, are supportive of this strategy to invest an extra AUD 3.0 billion in Telstra's network infrastructure, to proactively respond to future customer demand in terms of speed, data consumption and product/service.Analyst: Brian Han

Telstra's Leading Position and Reliable Cash Flow Make It an Attractive Income Stock

Telstra Corp

Telstra's Leading Position and Reliable Cash Flow Make It an Attractive Income Stock