The Telstra Corporation Ltd (ASX: TLS) share price is weathering the COVID-19 market meltdown better than most, but the calm could be marred by another mobile plan price war.

The risks of a price war are growing now that the merger between TPG Telecom Ltd (ASX: TPM) and Vodaphone is largely fait accompli.

A return of the bruising battle between mobile operators in late 2018 will almost certainly see the Telstra share price suffer after a period of relative outperformance.

While the stock is down by around 13% since the start of the year, the S&P/ASX 200 Index (Index:^AXJO) is lagging with a 17% decline due to the pandemic.

Smaller battle

The good news is that any new mobile war is unlikely to be as value destroying as the last one, according to UBS.

The broker is witnessing increasingly evidence of mobile discounting returning but believes the discounts will be more tactical this time round as opposed to outright price cuts on plans.

The tactical discounts are those that apply when customers bundle services or when existing customers add new services.

Itching for a fight

But Vodafone may be more motivated to win greater market share due to its greater exposure to international students. The number of these students have plummeted since the global coronavirus lockdown.

This means the number three network is likely to post falling subscriber numbers while Telstra gains subs.

Vodafone may also be forced to be more aggressive due to pressure from Telstra’s flanker brands. These brands sell lower cost plans under Belong and JB Hi-Fi Limited (ASX: JBH).  

UBS pointed out that the flanker brands are pressuring the average revenue per user (ARPU) across the industry by more than the market realises.

Further, Vodafone is likely to feel the heat to act as its ability to grow ARPU through 5G is more limited than Telstra.

Showing restrain

“We flag that whilst the benign industry status quo suits TLS best with its c50% share, the #3 player Vodafone may be less content with its existing c20% share. We therefore expect discounting to return incrementally,” said UBS.

“With industry post-tax ROICs [return on invested capital] (ex NBN migration payments) now only c4% vs c10% at FY16, MNOs [mobile network operators] simply cannot afford another downward repricing of their customer books.”

Who would have thought we can count on skinner returns and the cash crunch from the COVID-19 fallout to protect Telstra shareholders!

Foolish takeaway

But this doesn’t mean Telstra is out of the woods. UBS believes consensus earnings forecasts for our largest telco may be too optimistic as the market doesn’t seem to be pricing in any real competition.

On the other hand, I think as long as Telstra can cover its dividend payouts, investors will be willing to tolerate a hungrier competitor.

The fact is, the number of reliable and high dividend paying ASX stocks are in short supply.

More reading

• Brokers name 3 ASX 200 shares to buy right now
• ASX 200 down 0.2%: Wesfarmers overhauls Target, Sydney Airport has no plans to raise equity
• 3 reasons the Telstra dividend is sustainable for the foreseeable future
• Can you still invest like Warren Buffett in 2020?
• Why is the Telstra share price being left behind?

Motley Fool contributor Brendon Lau owns shares of Telstra Limited and TPG Telecom Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re planning to invest into the Australian share market, then one of the shares listed below could be worth considering whether you’re looking for growth, income, or value.

Here’s why I think these shares are in the buy zone:

Aristocrat Leisure Limited (ASX: ALL)

This gaming technology company could be a good option for value investors. The earnings of its core poker machine business have been hit hard by the pandemic and are likely to remain subdued until casinos reopen again. But once things return to normal, I expect Aristocrat’s group earnings to accelerate materially. Especially given the impressive growth being exhibited by its digital segment. Based on this, I estimate that its shares are changing hands at just 18x FY 2021 earnings. Given its positive long term outlook, I think this is a real gift for investors.

Pushpay Holdings Group Ltd (ASX: PPH)

Growth investors might want to consider an investment in this donor management platform provider. Pushpay is rapidly bringing the church market into the modern age with its increasingly popular platform. The company has just recorded exceptionally strong operating profit growth in FY 2020 and is guiding to further strong growth in FY 2021. Looking beyond this, management believes it has a massive market opportunity. And thanks to the quality of its platform, I expect it to capture a big slice of it.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

If you’re an income investor and can afford to be patient, then this airport operator could be a good option. The pandemic has impacted the travel and tourism markets materially in 2020, but they will recover in time. I suspect that domestic travel will recover reasonably quickly, with international travel taking another 12 months after that to recover. In light of this, I estimate that Sydney Airport will pay a 27 cents per share dividend in FY 2021 and then a 37 cents per share dividend in FY 2022. This implies yields of 4.7% and 6.5%, respectively, over the two years. I think this makes it a good option for patient investors.

More reading

• Brokers name 3 ASX 200 shares to buy right now
• Why Aristocrat Leisure, Afterpay, Corporate Travel, and Sydney Airport are pushing higher
• ASX 200 down 0.2%: Wesfarmers overhauls Target, Sydney Airport has no plans to raise equity
• 5 things to watch on the ASX 200 on Friday
• ASX 200 drops 0.4%, Chinese threat to Australian iron

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Where growth, income, and value investors can invest right now appeared first on Motley Fool Australia.

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I’m a big fan of growth shares, so feel quite fortunate to have a large number of quality options to choose from on the Australian share market.

And while the coronavirus crisis could stifle their growth in the immediate term, I believe many of them will bounce back strongly in FY 2021.

Three growth shares that I believe could provide market-beating returns for investors over the next decade are listed below. Here’s why I think growth investors ought to consider buying them:

Altium Limited (ASX: ALU)

Altium is an electronic design software company which I believe has the potential to generate strong returns for investors over the next decade. This is thanks to the company’s award-winning Altium Designer platform, which is exposed to the rapidly growing Internet of Things market. Altium is aiming for market leadership by 2025 with 100,000 Altium Designer subscribers. It expects this to lead to US$500 million revenue, up from its forecast for almost US$200 million in FY 2020.

Bubs Australia Ltd (ASX: BUB)

Another growth share which could be destined for big things is Bubs. It is an infant formula and baby food company which has been growing at a very strong rate over the last few years. And thanks to some recent supply agreements with major supermarkets, it looks well-placed to continue this positive form. Especially given the growing demand for ANZ-manufactured infant formula in the lucrative China market.

Xero Limited (ASX: XRO)

Another growth share to consider buying is cloud-based business and accounting software provider, Xero. Although the pandemic is likely to weigh on its subscriber growth in the immediate term, I believe its long term outlook remains very positive. Especially given how the company estimates that less than 20% of the global English-speaking SME market is using cloud-based accounting software. I believe this provides it with a significant runway for growth over the next decade. 

More reading

• 3 mid cap ASX growth shares to buy for monster returns
• 3 shares I’d buy if the coronavirus selloff gets worse
• How to become a millionaire with a $5,000 investment in ASX 200 shares each year
• Why I’d invest $1,000 in this ASX tech share today
• 3 five-star ASX 200 shares to buy right now

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of BUBS AUST FPO and Xero. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended BUBS AUST FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post 3 top ASX growth shares that could smash the market in the 2020s appeared first on Motley Fool Australia.

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