The Telstra Corporation Ltd (ASX: TLS) share price has fallen almost 19% in a one year.
TLS share price
The chart above compares the Telstra share price (blue) with the Commonwealth Bank of Australia (ASX: CBA) share price (yellow) and the broader market, or S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) (red).
As can be seen, Telstra has significantly underperformed its peers. In fact, some investors might argue that Telstra shares are well and truly in a bear market. After all, they have underperformed by around 29%, not including dividends.
Telstra's woes appear to stem from the growing competition in the broadband and mobiles markets, especially from the likes of TPG Telecom Ltd (ASX: TPM) and Optus.
However, at the current price of $4.32, Telstra shares are becoming more and more tempting for yield-hungry investors.
According to Morningstar data, analysts are forecasting yearly dividends equivalent to 6.94% at today's prices — fully franked, no less.
Following the recent sell down, analysts have stepped up their outlook for the company's shares, with six analysts (out of 16) now labelling Telstra as a 'buy', according to The Wall Street Journal. That's up from just one analyst three months ago.
Foolish Takeaway
My issue with Telstra is that it is going to find it tough to grow its per-share profits over the next few years. That's okay, though not ideal. But what it means is that investors must buy its shares when they trade below intrinsic value.
Unfortunately, I do not believe we are at that level just yet.
