TELEFONICA SA-SPON ADR (TEF) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TEF - US8793822086 - ADR
3.81 USD
-0.04 (-1.04%)
3.8 USD
-0.01 (-0.26%)
We assign a fundamental rating of 4 out of 10 to TEF. TEF was compared to 37 industry peers in the Diversified Telecommunication Services industry. While TEF is still in line with the averages on profitability rating, there are concerns on its financial health. TEF has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
- TEF had positive earnings in the past year.
- In the past year TEF had a positive cash flow from operations.
- The reported net income has been mixed in the past 5 years: TEF reported negative net income in multiple years.
- Each year in the past 5 years TEF had a positive operating cash flow.
1.2 Ratios
- With a Return On Assets value of -4.10%, TEF is not doing good in the industry: 62.16% of the companies in the same industry are doing better.
- TEF's Return On Equity of -21.56% is on the low side compared to the rest of the industry. TEF is outperformed by 70.27% of its industry peers.
- TEF's Return On Invested Capital of 7.73% is amongst the best of the industry. TEF outperforms 83.78% of its industry peers.
- TEF had an Average Return On Invested Capital over the past 3 years of 3.43%. This is below the industry average of 6.52%.
- The 3 year average ROIC (3.43%) for TEF is below the current ROIC(7.73%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.1% | ||
| ROE | -21.56% | ||
| ROIC | 7.73% |
ROA(3y)0.08%
ROA(5y)1.74%
ROE(3y)0.1%
ROE(5y)9.53%
ROIC(3y)3.43%
ROIC(5y)3.52%
1.3 Margins
- With a Operating Margin value of 12.00%, TEF perfoms like the industry average, outperforming 56.76% of the companies in the same industry.
- In the last couple of years the Operating Margin of TEF has grown nicely.
- Looking at the Gross Margin, with a value of 35.73%, TEF is doing worse than 78.38% of the companies in the same industry.
- In the last couple of years the Gross Margin of TEF has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12% | ||
| PM (TTM) | N/A | ||
| GM | 35.73% |
OM growth 3Y18.75%
OM growth 5Y8.06%
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y0.37%
GM growth 5Y-1.04%
2. Health
2.1 Basic Checks
- TEF has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
- Compared to 1 year ago, TEF has about the same amount of shares outstanding.
- The number of shares outstanding for TEF has been reduced compared to 5 years ago.
- TEF has a worse debt/assets ratio than last year.
2.2 Solvency
- The Debt to FCF ratio of TEF is 8.80, which is on the high side as it means it would take TEF, 8.80 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of TEF (8.80) is better than 70.27% of its industry peers.
- TEF has a Debt/Equity ratio of 2.07. This is a high value indicating a heavy dependency on external financing.
- Looking at the Debt to Equity ratio, with a value of 2.07, TEF is doing worse than 70.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.07 | ||
| Debt/FCF | 8.8 | ||
| Altman-Z | N/A |
ROIC/WACC1.8
WACC4.3%
2.3 Liquidity
- A Current Ratio of 0.84 indicates that TEF may have some problems paying its short term obligations.
- The Current ratio of TEF (0.84) is worse than 72.97% of its industry peers.
- A Quick Ratio of 0.80 indicates that TEF may have some problems paying its short term obligations.
- TEF has a Quick ratio of 0.80. This is in the lower half of the industry: TEF underperforms 75.68% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
- The earnings per share for TEF have decreased strongly by -34.78% in the last year.
- TEF shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.73% yearly.
- Looking at the last year, TEF shows a very strong growth in Revenue. The Revenue has grown by 40.77%.
- TEF shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -3.12% yearly.
EPS 1Y (TTM)-34.78%
EPS 3YN/A
EPS 5Y-8.73%
EPS Q2Q%-18.18%
Revenue 1Y (TTM)40.77%
Revenue growth 3Y1.7%
Revenue growth 5Y-3.12%
Sales Q2Q%-10.63%
3.2 Future
- Based on estimates for the next years, TEF will show a small growth in Earnings Per Share. The EPS will grow by 1.32% on average per year.
- TEF is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -1.34% yearly.
EPS Next Y-37.95%
EPS Next 2Y-9.33%
EPS Next 3Y-2.22%
EPS Next 5Y1.32%
Revenue Next Year-11.05%
Revenue Next 2Y-5.32%
Revenue Next 3Y-3.08%
Revenue Next 5Y-1.34%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 10.89, the valuation of TEF can be described as very reasonable.
- Compared to the rest of the industry, the Price/Earnings ratio of TEF indicates a rather cheap valuation: TEF is cheaper than 86.49% of the companies listed in the same industry.
- TEF's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.32.
- The Price/Forward Earnings ratio is 9.90, which indicates a very decent valuation of TEF.
- TEF's Price/Forward Earnings ratio is rather cheap when compared to the industry. TEF is cheaper than 91.89% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.32, TEF is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.89 | ||
| Fwd PE | 9.9 |
4.2 Price Multiples
- Based on the Price/Free Cash Flow ratio, TEF is valued cheaper than 97.30% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.76 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- TEF's earnings are expected to decrease with -2.22% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-9.33%
EPS Next 3Y-2.22%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 7.20%, TEF is a good candidate for dividend investing.
- The stock price of TEF dropped by -26.73% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
- TEF's Dividend Yield is rather good when compared to the industry average which is at 2.33. TEF pays more dividend than 91.89% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.83, TEF pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.2% |
5.2 History
- The dividend of TEF decreases each year by -5.71%.
- TEF has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-5.71%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- The earnings of TEF are negative and hence is the payout ratio. TEF will probably not be able to sustain this dividend level.
DP-48.26%
EPS Next 2Y-9.33%
EPS Next 3Y-2.22%
TELEFONICA SA-SPON ADR / TEF FAQ
What is the ChartMill fundamental rating of TELEFONICA SA-SPON ADR (TEF) stock?
ChartMill assigns a fundamental rating of 4 / 10 to TEF.
Can you provide the valuation status for TELEFONICA SA-SPON ADR?
ChartMill assigns a valuation rating of 6 / 10 to TELEFONICA SA-SPON ADR (TEF). This can be considered as Fairly Valued.
How profitable is TELEFONICA SA-SPON ADR (TEF) stock?
TELEFONICA SA-SPON ADR (TEF) has a profitability rating of 4 / 10.
What is the valuation of TELEFONICA SA-SPON ADR based on its PE and PB ratios?
The Price/Earnings (PE) ratio for TELEFONICA SA-SPON ADR (TEF) is 10.89 and the Price/Book (PB) ratio is 1.04.
What is the earnings growth outlook for TELEFONICA SA-SPON ADR?
The Earnings per Share (EPS) of TELEFONICA SA-SPON ADR (TEF) is expected to decline by -37.95% in the next year.