There’s a lot of speculation that Telstra Corporation Ltd (ASX: TLS) may have to cut its dividend in FY 2021 due to the impact of the pandemic on its earnings.

While I’m optimistic that a shift to a free cash flow-based dividend policy would allow for it to be maintained, there is no certainty that it will do this.

In light of this, I understand why some income investors are staying clear of Telstra right now.

If you would prefer to invest in dividend shares that are likely to grow in FY 2021, then you might want to consider the two listed below. Here’s why I like them:

Coles Group Ltd (ASX: COL)

The first ASX dividend share to consider buying is Coles. I think the supermarket giant is well-positioned for growth over the coming years thanks to its defensive qualities, expansion opportunities, and its long track record of same store sales growth. In respect to the latter, Coles has used its strong market position to deliver 50 consecutive quarters of same store sales growth.

And while it may struggle to outperform the third quarter panic buying of FY 2020 when it cycles it, I’m confident its future growth will still be very positive. Another positive is its focus on cost cutting and automation. This should support its margins and ultimately its earnings and dividend growth over the coming years. For now, based on the current Coles share price, I estimate that it offers investors a fully franked ~3.2% FY 2021 dividend.

Rural Funds Group (ASX: RFF)

Another ASX dividend share to buy is Rural Funds. I think the agriculture-focused property group is in a great position to continue growing its distribution at a solid rate over the next decade. This is thanks to its high quality portfolio of assets that are spread across several different industries. These include cattle, wine, and almond production. 

A big positive in my eyes is Rural Funds’ long term tenancy agreements. At the last count its weighted average lease expiry was ~11 years. And with rental increase built into these contracts, I feel its long term distribution growth looks very secure. This certainly looks to be the case for FY 2021, with management intending to grow its distribution by 4% to 11.28 cents per share. Based on the latest Rural Funds share price, this equates to a 5.2% yield.

More reading

• Top brokers name 3 ASX shares to buy next week
• 4 ASX shares to profit from booming ecommerce
• Important takeaways from the Telstra analyst call
• Telstra and 2 more ASX dividend shares I like in August
• Why I would buy Woolworths and this ASX share for a retirement portfolio

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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Is the Vanguard MSCI Index International Shares ETF (ASX: VGS) the best long-term investment?

A quick overview of Vanguard

Vanguard is one of the world’s leading providers of exchange-traded funds (ETFs). It aims to provide investment options at a low cost. The benefit of lower investment costs is that it increases the net returns for investors. Fees are one of the main factors that cause some fund managers’ net returns to be lower than the index over time. Not only do fund managers charge annual management fees but they also charge performance fees when they outperform.

The benefit of investing in an ETF is that you can invest in many businesses (or other assets) through a single investment. It’s simple and easy investing. 

Vanguard MSCI Index International Shares ETF

The aim of this particular ETF is to provide exposure to many of the world’s largest companies listed in major developed countries outside of Australia.

Holdings

The ETF is actually invested in around 1,550 holdings. That’s excellent diversification considering all of the quality companies that it’s invested in.

I’m sure you’ve heard of many, if not all, of its largest holdings: Apple, Microsoft, Amazon, Alphabet, Facebook, Johnson & Johnson, Nestle, Visa, Proctor & Gamble and JPMorgan Chase & Co.

It also owns plenty of other big, quality businesses you’ve probably heard of like Mastercard, Berkshire Hathaway, Nvidia, Paypal, Netflix, Adobe, Tesla, Walt Disney, Intel, Bank of America, Coca Cola, PepsiCo, Walmart, McDonalds and so on.

As you can tell from many of the names mentioned, US-listed businesses makes up the majority of this ETF. Indeed, the US makes up just over two thirds of Vanguard MSCI Index International Shares ETF.

But just because they’re listed in the US doesn’t mean the underlying earnings are from the US. Apple sells phones across the world. Facebook and Alphabet’s Google advertise across the world. Many of the holdings are truly global businesses.

In terms of industry diversification, I think it has an attractive allocation across different sectors. Around 22% is invested in IT businesses. It’s attractive to have the biggest allocation here because technology is the sector that’s delivering the most growth.

Other sectors that get an allocation of more than 10% are: healthcare, financials, consumer discretionary and industrials.

Fees

Vanguard charges an annual management fee of 0.18% per annum for Vanguard MSCI Index International Shares ETF.

That fee is a lot cheaper than most Australian fund managers that invest into overseas shares. However, it’s not the cheapest ETF out there. For example, Vanguard U.S. Total Market Shares Index ETF (ASX: VTS) has an annual management fee of just 0.03%. Fees are important, but it should be the net returns that should be the most important factor.

Returns

Vanguard MSCI Index International Shares ETF has suffered from the COVID-19 selloff. Industries like banks and airlines are still a long way below their peaks.

Over the past three years the ETF has returned an average of 11.7% per annum and over the past five years it has returned an average of 8.2% per annum. Not bad, but there have been other ETFs that have done a lot better.

Is Vanguard MSCI Index International Shares ETF a buy today?

The Australian dollar has strengthened against the US dollar, so it’s a better time to buy this ETF than in prior months considering over two thirds of the ETF is made up of US shares.

I think it’s the type of ETF that you could own as your only investment for your whole life. It’s very diversified, has low costs, it has a decent starting dividend yield of 2.25% and is likely to generate reasonable long-term capital growth.

If ETF investing was my focus then I’d be happy to invest in the ETF today. However, I’d also be interested in looking into BetaShares Global Quality Leaders ETF (ASX: QLTY) or Betashares Global Sustainability Leaders ETF (ASX: ETHI).

More reading

• Is now a good time to buy Magellan shares?
• 3 quality ASX shares for a beginner’s share portfolio
• These ASX ETFs could generate strong long term returns
• How to become a millionaire with ASX shares starting with $0
• Where to invest $3,000 in ASX shares right now

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares ETF. 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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Magellan Financial Group Ltd (ASX: MFG)

According to a note out of Morgan Stanley, its analysts have retained their underweight rating but lifted their price target on this fund manager’s shares slightly to $48.00. Although Magellan delivered a result largely in line with expectations and is looking to broaden its offering with new product launches, it isn’t enough for a change in rating. Morgan Stanley continues to believe that its shares are expensive in comparison to its global peers. The Magellan share price ended the week at $65.36.

Sonic Healthcare Limited (ASX: SHL)

Analysts at UBS have retained their sell rating and $28.00 price target on this healthcare company’s shares ahead of its full year results. According to the note, the broker expects Sonic Healthcare to deliver solid top line growth, but a 7% decline in earnings in FY 2020. And while it looks set to benefit from strong COVID-19 testing demand, it fears this may be offset by weakness in other areas. In light of this, it feels its shares are fully valued and retains its sell rating. Sonic Healthcare’s shares last traded at $34.03.

WiseTech Global Ltd (ASX: WTC)

A note out of Citi reveals that its analysts have downgraded this logistics solutions company’s shares to a sell rating with a reduced price target of $18.40. The broker made the move after revising its earnings estimates lower to reflect the challenging economic environment and slowing M&A activity. It expects this to weigh on its revenue growth in the near term. The WiseTech share price ended the week at $19.93.

More reading

• My favourite 3 ASX share reports of the week
• Is now a good time to buy Magellan shares?
• ASX 200 drifts 0.1% lower, CBA reports solid FY20 result
• Why the Magellan share price might be a post-earnings buy today
• Earnings season: Magellan share price climbs higher after positive annual report

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of WiseTech Global. The Motley Fool Australia has recommended Sonic Healthcare 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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Last week saw a large number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

A2 Milk Company Ltd (ASX: A2M)

A note out of UBS reveals that its analysts have retained their buy rating and NZ$22.00 (A$20.25) price target on this fresh milk and infant formula company’s shares. According to the note, UBS believes a2 Milk could outperform the market’s expectations when it releases its results this month. It notes that demand for its infant formula has been particularly strong on Chinese ecommerce platforms. I think UBS is spot on and a2 Milk shares would be great long term options for investors.

Coles Group Ltd (ASX: COL)

Analysts at Citi have retained their buy rating and put a price target of $21.40 on this supermarket operator’s shares. According to the note, the broker believes that Coles is benefiting from very positive trading conditions. As a result, it expects the company to have a strong first half to FY 2021. In addition to this, although its shares trade at a premium to the market average, the broker believes this is deserved because of its defensive qualities and the stability of its earnings and dividend. I agree with Citi and would be a buyer of Coles shares.

Treasury Wine Estates Ltd (ASX: TWE)

According to a note out of the Macquarie equities desk, its analysts have upgraded this wine company’s shares to an outperform rating with a $14.90 price target. The broker made the move after Treasury Wine delivered a full year result in line with expectations. It was also pleased with its costs cutting plans and news that Chinese sales were rebounding. The latter gives the broker confidence in Treasury Wine’s medium term growth prospects. I think Macquarie makes some good points and it could be worth considering.

More reading

• 5 things to watch on the ASX 200 next week
• How to turn $20,000 into $900,000 in 5 years with ASX shares
• These were the best performing ASX 200 shares last week
• Why today is a great day to add to your ASX share portfolio
• Is the Charter Hall share price a buy, post-earnings?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia owns shares of A2 Milk and COLESGROUP DEF SET. 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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It’s getting harder to find good levels of income these days. ASX dividend shares could be the answer.

However, just because something has a seemingly big dividend yield doesn’t mean it’s automatically a good choice. Just look at Commonwealth Bank of Australia (ASX: CBA) – its final dividend was cut heavily and the next interim dividend could be cut too.

I don’t think there are many ASX blue chips with large yields that could solid dividend payers during this period. Wesfarmers Ltd (ASX: WES) and APA Group (ASX: APA) would be two blue chips I’d be happy to rely on for income. The problem is that their starting yields aren’t that high.

These ASX dividend shares have big yields and I think the dividends will grow over time:

Naos Emerging Opportunities Company Ltd (ASX: NCC)

This business is a listed investment company (LIC) which invests in small ASX shares with market capitalisations under $250 million. This is the small end of the ASX.

One of the main benefits of LICs is that fund managers can make investment returns – largely capital gains – and then it can steadily pay out those gains as a smoothed dividend.

The Naos LIC has done very well with its dividend. It started paying a dividend in FY13 and it has grown or maintained its dividend every year since.

At the end of July 2020 the ASX dividend share offered a grossed-up dividend yield of 12.3%. At the current Naos Emerging Opportunities Company share price it’s trading at a 13.5% discount to its pre-tax net tangible assets (NTA) per share. That means you can buy $1 for shares for $0.875

At the end of last month it had nine positions in its portfolio., so it’s a high conviction portfolio. But it offers diversification as well.

Vitalharvest Freehold Trust (ASX: VTH)

Vitalharvest is a real estate investment trust (REIT) which owns agricultural farmland. Specifically, it owns berry and citrus fruit farms. At the moment all of its farms are leased to Costa Group Holdings Ltd (ASX: CGC).  

The ASX dividend share generates rental income in two ways. It receives a fixed rental income from Costa and it also has a profit share agreement – it receives 25% of the profit from the farms.

Costa’s earnings have been troubled over the past couple of years because of the drought, crumbly berries and fruit flies at the citrus farms. Despite all of those issues, Vitalharvest’s distribution still amounts to a 6% yield today.

If profitability per share returned to the 2019 levels then Vitalharvest’s distribution yield could be 7.1%.

The ASX dividend share has recently switched managers. The new one will be looking for acquisitions to increase diversification and boost the rental profit (and the distribution). The new targets may offer a more stable income as well.

PM Capital Global Opportunities Fund Ltd (ASX: PGF)

PM Capital Global Opportunities Fund is another LIC. This one targets overseas shares.

The ASX dividend share has a current grossed-up dividend yield of 6.5%. The LIC just increased its final dividend by 25% to 2.5 cents per share. If it pays another 2.5 cents per share dividend in six months then it will have a grossed-up dividend yield of 7.25% today.

Some of the shares that it currently owns includes Visa, Siemens, Bank of America, Freeport-McMoRan, Oracle, KKR & Co and Alphabet (Google).

It has increased its dividend each year since 2016 and it could keep growing its dividend over the long-term if its investments turn out well.

At the current PM Capital Global Opportunities Fund share price it’s trading at a 16.5% discount to the NTA at 7 August 2020.

Foolish takeaway

Each of these ASX dividend shares offer something different for income investors. The Naos LIC has a huge yield. Vitalharvest offers alternative income with its food-related properties. PM Capital Global Opportunities Fund has a steadily-growing dividend with good diversification.

More reading

• 3 ASX shares trading at crazy cheap prices
• Why the FY20 result sent the PM Capital Global Opportunities Fund share price up 4%
• Top ASX dividend shares to buy in August 2020
• Why the Coca-Cola share price and these ASX stocks just got upgraded by brokers to “buy”
• 2 ASX shares that are absurdly cheap right now

Motley Fool contributor Tristan Harrison owns shares of PM Capital Global Opportunities Fund Ltd. The Motley Fool Australia owns shares of APA Group and Wesfarmers 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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The ecommerce trend is booming right now. Australia was slowly moving towards online shopping due to convenience but now COVID-19 restrictions (and consumer habits) are causing a rapid rise in ecommerce. Some ASX shares are profiting. 

There are a few different ways you can try to play this.

There are some ASX share retailers that are seeing a huge amount of online sales growth such as Premier Investments Limited (ASX: PMV) and Adairs Ltd (ASX: ADH). However, some of that ecommerce trend may reverse once stores are open nationally again, leading to more sales being done in-store. But these are good options to consider for ecommerce growth. 

It could be better to think about getting exposure to ecommerce through one of these ASX shares:

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster is an online furniture and homewares retailer. The company has seen a huge amount of growth over the past six months.

The ASX share said that in FY20 it grew revenue by 74%, in the second half of FY20 revenue increased by 96% and in the fourth quarter revenue rose by 130%. Active customers increased by 70% year on year.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) jumped by 467% to $8.5 million during FY20.

Temple & Webster is clearly growing at an impressive rate. But the Temple & Webster share price has also rocketed – since 23 March 2020 the share price has gone up 400%.

In July the company said its revenue growth rate was in line with the fourth quarter of FY20 (where it was up 130%).

The ASX share will need to keep up strong growth to justify the current share price, but it if it does it could become pleasingly profitable because of the cheaper online model.

Brickworks Limited (ASX: BKW) and Centuria Industrial Reit (ASX: CIP)

Centuria Industrial Reit is the largest real estate investment trust (REIT). Logistics is an important part of the ecommerce trend and this REIT could be one of the better ways to gain exposure to the underlying trend. It also announced the purchase of a Telstra Corporation Ltd (ASX: TLS) data centre in Melbourne for $416.7 million. The REIT is shifting towards the new industries in Australia.  

The older divisions of Brickworks are the building products and the stock holding of ASX share Washington H. Soul Pattinson and Co. Ltd (ASX: SOL). But it also has an exciting 50% stake of an industrial property trust. This trust is building two large, high-tech warehouses for Amazon and Coles Group Limited (ASX: COL). This should dramatically increase the value and rental earnings of the property trust.

I think both of the above ASX shares are defensive ways to play the rise of ecommerce in Australia.

Kogan.com Ltd (ASX: KGN)

Kogan.com is another ASX share which is an online-only business. It sells a wide variety of different products and items like phones, appliances, office supplies, garden supplies and so on. It also offers services like insurance and superannuation.

The Kogan.com share price has risen by 323% over the past six months. It was growing at a decent rate before COVID-19 but the current conditions have really accelerated its growth.

FY20 revealed an exciting amount of growth and July 2020 has seen that trend continue. Last month gross sales rose by over 110%, gross profit increased by more than 160% and adjusted EBITDA was more than $10 million.

Customers may have made a permanent shift to using Kogan.com as a place they shop with. Active customers have grown to 2.31 million, which is a large customer base for Kogan.com to sell to. It has pretty good network effects – if it can sell more services to the same customer then its profit margins can increase.

Kogan.com would need to keep up the current growth rate for a while to justify the current price, but it may be able to do it.

Foolish takeaway

I think all four of these ASX shares are good ecommerce options. Kogan.com and Temple & Webster are flying high and could keep going up. But I believe that Brickworks is the best value out of the four options with its various divisions with diversified earnings.

More reading

• Important takeaways from the Telstra analyst call
• My favourite 3 ASX share reports of the week
• Telstra and 2 more ASX dividend shares I like in August
• 2 ASX dividend shares with yields over 6% today
• Brokers name 3 ASX shares to buy right now

Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Brickworks, Premier Investments Limited, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Kogan.com ltd and Temple & Webster Group Ltd. 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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The S&P/ASX 200 Index (ASX: XJO) was on form gain last week and recorded another strong gain. The benchmark index rose an impressive 2% over the period to finish at 6,126.2 points.

Will there be more of the same next week? Here are five things to watch:

ASX futures pointing lower.

The benchmark ASX 200 looks set to start the week in the red. According to the latest SPI futures, the ASX 200 is poised to open the week 58 points lower on Monday. This follows a reasonably underwhelming finish to the week on Wall Street. On Friday the Dow Jones rose 0.1%, the S&P 500 was flat, and the Nasdaq index fell 0.2%.

CSL results.

On Wednesday the CSL Limited (ASX: CSL) share price will be in focus when it hands in its eagerly anticipated full year results. According to CommSec, the market is expecting the biotherapeutics giant to post a net profit after tax of US$2.11 billion. But perhaps the most important part of its release will be its outlook for FY 2021. There are concerns that disruptions to plasma collections during the pandemic could weigh heavily on its FY 2021 results.

Strong profit growth expected from A2 Milk Company.

Also in focus on Wednesday will be the A2 Milk Company Ltd (ASX: A2M) share price when it hands in its full year results. Management has provided guidance for revenue in the range of NZ$1,700 million to NZ$1,750 million in FY 2020. On the bottom line, according to CommSec, the market is expecting the infant formula and fresh milk company to report a net profit after tax of NZ$389 million. This will be up 35% on FY 2019’s net profit after tax of NZ$287.7 million.

Travel results galore.

Investors will get to see just how badly the pandemic has impacted the travel sector this week. A number of companies with exposure to the travel and tourism markets are scheduled to release their results. This includes Corporate Travel Management Ltd (ASX: CTD) and Crown Resorts Ltd (ASX: CWN) on Wednesday and Qantas Airways Limited (ASX: QAN) and Webjet Limited (ASX: WEB) on Thursday.

Fortescue to declare a massive dividend?

The Fortescue Metals Group Limited (ASX: FMG) share price will be on watch on Monday when it releases its full year results. Expectations are high for the mining giant due to its strong production and the sky-high iron ore price. Last week Macquarie suggested Fortescue could pay a dividend of ~$1.80 per share for FY 2020. This represents a massive 10% dividend yield.

More reading

• How to turn $20,000 into $900,000 in 5 years with ASX shares
• These were the best performing ASX 200 shares last week
• ASX 200 rises 0.6%, Mesoblast soars
• Why I’d buy today’s CSL share price over Mesoblast
• Wage growth is plummeting – here are 3 ASX dividend shares to start a second income

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 CSL Ltd. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended Crown Resorts 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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While most readers will have seen the Telstra Corporation Ltd (ASX: TLS) full year result for FY 2020 last week, not everyone will have had chance to listen to its analyst call.

In light of this, I thought I would highlight a few key questions and answers from the call that may help you with an investment decision.

What was discussed on the Telstra analyst call?

Telstra’s CEO, Andy Penn, was asked about NBN profitability. Once again, the chief executive voiced his concerns over NBN wholesale pricing.

He said: “In terms of NBN profitability, if you look at our reported ARPU on fixed broadband, I think it’s around $71, $75 or something like that, it’s probably slightly lower in relation to NBN as we are still partway through the migration to that, and we’ve got input costs there of around $45, $46 already that we pay to the NBN.”

“… the fundamental problem is, is that if your wholesale price is two thirds of the retail price, which essentially it is, that’s what makes it incredibly challenging, when as a retailer you’ve got to distribute and market the product, you’ve got to service it, you’ve got to manage billing, you’ve got to put in modems, deal with a lot of the complexities of the administration and the management and the service of NBN,” he added.

And while Telstra is aiming to improve the efficiency and profitability of its NBN service, Mr Penn stressed that “there’s a bigger structural problem there as well just given where wholesale prices are today, and where NBN’s ARPUs are intended to get to.”

The dividend.

There’s been a lot of talk about the sustainability of its dividend. This stems from Telstra’s dividend policy which aims to pay out 70% to 90% of accounting earnings. However, these earnings are generally lower than its cash earnings.

This has led to many analysts suggesting Telstra should change its focus to a free cash flow-based dividend policy.

Mr Penn commented: “On the point about dividend, there hasn’t been a change of policy, but there is a bit of a structural shift happening for us, which we expect to sustain over a longer period of time between our cash earnings and our accounting earnings, where our cash earnings will be quite a bit lower – sorry, our cash earnings will be higher than our accounting earnings, and our DN&A will be [higher] than our cash CapEx, and so that actually assists us in that regard.”

Competition.

This year a third major telco player was created with the merger of TPG Telecom Ltd (ASX: TPG) and Vodafone Australia. Telstra’s executives were quizzed on recent price increases and whether they expect them to hold if the competition doesn’t follow.

CFO, Vicki Brady, commented: “At this point we’re really pleased with how customers have reacted to that. As we’ve said before, we think this is an important point as 5G scales up, and we think it’s really important, and customers know it’s important, they really balance value, quality and price. And with our leadership position in 5G and our extending network differentiation, that’s what we’re really focused on and committed to, and our competitors will choose to react as they see fit.”

COVID-19 impact.

Telstra was also asked about the $600 million COVID-19 impact that it is facing over FY 2020 and FY 2021. Analysts were curious about whether any of these lost earnings would return.

Brady responded: “Just to talk a little bit more about the COVID impact. So if I focus on 2021 and our estimated $400 million, as you as you said, the roaming piece is uncertain, and it is $200 million of that impact in 2021. Obviously I think we all hope to get back to international travel at some stage, but it is unclear when that will be, and until that happens obviously international roaming continues to be impacted.”

“On the $100 million of productivity impact from the delays in our T22 productivity job reductions, that is timing. Clearly that’s something we will come back to in February 2021, and so that productivity is not a permanent change, that is just a timing change.”

“In terms of the customer related support packages and the impacts on our NAS professional services, again timing is uncertain, but we would certainly hope that they are temporary impacts, not permanent impacts,” she added.

Conclusion.

At the end of the call, Mr Penn spoke positively about the future.

He concluded: “We’ve met guidance, we’ve delivered our dividend. We’re providing guidance for FY21. There’s a few economic implications of COVID in the current situation for us, but we think we’re balancing making the right decisions of being responsible, supporting our customers and our people and delivering returns for our shareholders. But more importantly setting us up for growth as we come out of COVID with the investment in digital that we’ve made, but also the acceleration of the rollout to 5G.”

More reading

• Telstra and 2 more ASX dividend shares I like in August
• Brokers name 3 ASX shares to buy right now
• Brokers just downgraded the Telstra share price and these other ASX 200 stocks
• Is the Telstra dividend in danger? This leading broker thinks it’s safe
• ASX 200 drops 0.7%, Telstra falls 7.7%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. 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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