Tel: (02) 9633 3300 Facebook LinkedIn
Client LoginAdviser Login
  • Home
  • Who we are
    • Who we are
    • Adviser team
      • Simon Clifford
      • Tony Fox
      • Troy McPhee
      • Robert De Ceglie
      • Siboney Corrales-Palacio
    • 24 hours – A day in the life of Adviser fp
  • What we do
    • What we do
    • Financial planning
    • Financial planning process
    • Gearing
    • Personal insurance planning
    • Redundancy planning
    • Superannuation & retirement planning
    • Self managed superannuation funds (SMSF)
    • Family Business
    • Aged Care – Family & Financial Decisions
    • Information tables, rates & calculators
    • Glossary of terms widely used in financial services
    • General Advice Warning
  • Why choose Adviser fp
    • Adviser fp Client Experience
    • Do you need a financial planner?
    • Your first meeting
    • Five common financial planning mistakes
  • News, Articles and Updates
    • News
    • Financial Knowledge Centre
    • The money needed for a comfortable retirement
    • Buying Life Insurance direct: All is not as it seems
    • The great Australian dream
    • Financially Speaking newsletter
    • Economic Update
    • Financial markets summary & table
  • Contact us
2017 FY Reporting Season: Focus on CBA & TLS

2017 FY Reporting Season: Focus on CBA & TLS

Date: September 20, 2017

FINANCIAL YEAR 2017: REPORTING SEASON INSIGHTS AND IMPLICATIONS

This extract has been drawn from the article produced on 20th September 2017, by Roy Maslen, Chief Investment Officer—Australian Equities, AllianceBernstein

Q: Commonwealth Bank of Australia (CBA) and Telstra (TLS) captured a lot of attention this reporting season. What are your thoughts on them, and do they still offer opportunities?

A: CBA and TLS were probably the two most controversial stocks of the season.

 

CBA: The Commonwealth Bank’s underlying results were quite good but the market’s focus, of course, was on the AUSTRAC investigation into the bank’s alleged failure to comply with anti-money laundering legislation, and on APRA’s inquiry into the bank’s governance and culture.

Both developments could have a negative impact on the stock and—given that the stock had been priced at a premium—they have made us more cautious.

Depending on their findings, AUSTRAC could levy a fine and APRA could direct the bank to hold more capital. Either of these would weigh on Commonwealth Bank’s earnings, particularly when combined with continuing pressure for a Royal Commission into the banking sector.

 

TLS: Telstra is a very different story. The underlying performance was slightly weak but the big news was a cut in the dividend from 31 to 22 cents. We had expected a cut, with 25 cents at the bottom of our expectations.

The market was very disappointed and the poor communication of the results led the market to reflect on its outlook for the business.

Our view, however, is that Telstra has been very conservative: such a large cut gives the company enough scope to grow the dividend over time, and to do so in an environment of falling revenue as its own network winds down and the National Broadband Network (NBN) goes live.

That 22-cent dividend, including franking credits, gives a yield of more than 8% with potential for growth. We also see attractive valuation in the stock and, even considering some of the headwinds with the launch of the NBN, we think there are likely to be fewer negative events in the short term.

 

Source: AB Volatility Insights: Reporting Season Insights and Implications for the AB Managed Volatility Equities Fund.

This information is for exclusive use of the wholesale person to whom it is provided and not to be relied upon by any other person. It is not intended for retail or public use and may not be further distributed without prior written consent of ABAL.
This email has been prepared by AllianceBernstein Australia Limited (“ABAL”)—ABN 53 095 022 718, AFSL 230 698. Information in this document is only intended for persons that qualify as “wholesale clients,” as defined by the Corporations Act 2001, and is not to be construed as advice. This document is provided solely for informational purposes and is not an offer to buy or sell securities. The information, forecasts and opinions set forth in this document have not been prepared for any recipient’s specific investment objectives, financial situation or particular needs. Neither this document nor the information contained in it are intended to take the place of professional advice. You should not take action on specific issues based on the information contained in this document without first obtaining professional advice.
Past performance does not guarantee future results. Projections, although based on current information, may not be realized. Information, forecasts and opinions can change without notice and ABAL does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained in this document, ABAL does not warrant that this document is free from errors, inaccuracies or omissions. ABAL disclaims any liability for damage or loss arising from reliance upon any matter contained in this document except for statutory liability which cannot be excluded.

Share this Story

  • Facebook
  • Twitter
  • LinkedIn
Categories
  • Aged Care
  • Budgetting
  • Business Succession
  • Buy / Sell agreements
  • Capital Gains
  • Cashflow Management
  • Centrelink
  • Certified Financial PLanner
  • Charitable Giving
  • Economic Outlook
  • Emerging Markets
  • End of Financial Year
  • Estate Planning
  • Financial Markets
  • Financial Planning
  • Financial Planning Association (FPA)
  • Goals
  • Income
  • Investment
  • Life Insurance
  • Lifestyle
  • Market Outlook
  • Partnerships
  • Philanthropy
  • Politics
  • Professionalism
  • Property Investing
  • Retirement
  • Risk Management
  • Salary Packaging
  • Savings
  • Sharemarket
  • Succession Planning
  • Superannuation
  • Tax Planning
  • Taxation
  • Uncategorized
  • Wills
Archives
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017
  • October 2017
  • September 2017
  • August 2017
  • June 2017
  • May 2017
  • February 2017
  • December 2016
  • November 2016
  • October 2016
  • September 2016
  • August 2016
  • July 2016
  • June 2016
  • May 2016
  • April 2016
  • March 2016
  • February 2016
  • January 2016
  • December 2015
  • November 2015
  • October 2015
  • September 2015
  • August 2015
  • July 2015
  • June 2015
  • May 2015
  • April 2015
  • March 2015
  • February 2015
  • January 2015
  • December 2014
  • November 2014
Adviser FP
Adviser fp Pty Ltd is an Authorised Representative of FP Advice Pty Ltd
ABN 30 637 518 533 | AFSL 520310 | Financial Services Guide

Adviser fp Pty Ltd is proud to be an approved FPA Professional Practice

This information is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this information, you should assess your own circumstances or seek advice from a financial planner and seek tax advice from a registered tax agent. Information is current at the date of issue and may change.
Copyright © 2021 Adviser fp Pty Limited. All rights reserved.
Professional Practice
  • Privacy Policy
  • |
  • Financial Service Guide
  • |
  • Conditions for using this website
  • |
  • Site by wolff