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Telstra Group Ltd and REA Group Ltd are key players in their fields. Telstra, an ASX communication stock, has seen a slight dip in its share price in 2024 but remains strong with a solid dividend yield. In contrast, REA Group is nearing its 52-week high, showcasing its strong position in real estate advertising. This article highlights their current performance and market advantages.
Telstra Group Ltd (ASX:TLS)
Telstra Group Ltd, Australia's leading telecommunications provider, has seen its share price decrease by 1.0% since the beginning of 2024. Founded in 1975, Telstra operates a vast network, covering 99.6% of the Australian population and offering 5G services to over 85% of Australians.
The company, which provides a range of services including fixed broadband, mobile, data and IP, and digital media, also extends its reach to over 20 countries outside Australia. Telstra's extensive network and scale give it a competitive edge in the telecommunications market.
As a blue-chip stock, Telstra's performance is often evaluated through metrics like return on invested capital (ROIC) and revenue growth. For the fiscal year 2023, Telstra reported an ROIC of 10.20%, indicating a solid return relative to its cost of capital. Additionally, the company's revenue has compounded at a rate of 2.1% in recent years, reflecting steady growth.
Telstra's dividend yield currently stands at approximately 4.58%, slightly above its 5-year average of 4.50%. This suggests that while the share price has seen some decline, the dividend yield remains robust, providing a consistent income stream for shareholders.
REA Group Ltd (ASX:REA)
In contrast, REA Group Ltd has seen its share price come within 6.4% of its 52-week high. Established in 1995 and headquartered in Melbourne, REA Group is best known for its Realestate.com.au platform. The company operates globally, managing property websites in around 10 countries and serving about 20,000 agents.
In Australia, REA Group's core website attracts over 55 million visits each month, demonstrating its significant reach in the real estate market. The company earns revenue through property listings and, to a lesser extent, financial services such as mortgage broking. REA's competitive advantage lies in its extensive network effects and economies of scale, which allow it to dominate the real estate advertising market and maintain control over pricing and market dynamics.
While Telstra Group Ltd is experiencing a modest decline in share price, its strong dividend yield and solid ROIC highlight its stability and maturity as a blue-chip stock. On the other hand, REA Group Ltd continues to approach its 52-week high, reflecting its strong position in the real estate advertising sector and its ability to leverage network effects for sustained growth.
