TELEFONICA SA-SPON ADR (TEF) Stock Fundamental Analysis
NYSE:TEF - New York Stock Exchange, Inc. - US8793822086 - ADR - Currency: USD
TEF gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 32 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 it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year TEF was profitable.
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.
In the past 5 years TEF always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of TEF (-0.32%) is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of -1.64%, TEF is in line with its industry, outperforming 56.25% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 2.54%, TEF is in line with its industry, outperforming 53.13% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TEF is below the industry average of 5.49%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.32% | ||
| ROE | -1.64% | ||
| ROIC | 2.54% |
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
The Operating Margin of TEF (5.82%) is comparable to the rest of the industry.
TEF's Operating Margin has improved in the last couple of years.
TEF has a Gross Margin (49.39%) which is comparable to the rest of the 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 | 5.82% | ||
| PM (TTM) | N/A | ||
| GM | 49.39% |
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 below the Cost of Capital (WACC), which means it is destroying 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.
The debt/assets ratio for TEF is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.96, we must say that TEF is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of TEF (0.96) is better than 71.88% of its industry peers.
TEF has a debt to FCF ratio of 9.58. This is a negative value and a sign of low solvency as TEF would need 9.58 years to pay back of all of its debts.
TEF has a Debt to FCF ratio of 9.58. This is in the better half of the industry: TEF outperforms 62.50% of its industry peers.
TEF has a Debt/Equity ratio of 2.03. This is a high value indicating a heavy dependency on external financing.
TEF's Debt to Equity ratio of 2.03 is on the low side compared to the rest of the industry. TEF is outperformed by 68.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 9.58 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.64
WACC3.95%
2.3 Liquidity
A Current Ratio of 0.87 indicates that TEF may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.87, TEF is doing worse than 65.63% of the companies in the same industry.
TEF has a Quick Ratio of 0.87. This is a bad value and indicates that TEF is not financially healthy enough and could expect problems in meeting its short term obligations.
TEF's Quick ratio of 0.83 is on the low side compared to the rest of the industry. TEF is outperformed by 65.63% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
TEF shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.11%, which is quite good.
Measured over the past years, TEF shows a decrease in Earnings Per Share. The EPS has been decreasing by -8.75% on average per year.
Looking at the last year, TEF shows a small growth in Revenue. The Revenue has grown by 1.63% in the last year.
The Revenue has been decreasing by -3.12% on average over the past years.
EPS 1Y (TTM)11.11%
EPS 3YN/A
EPS 5Y-8.75%
EPS Q2Q%-50%
Revenue 1Y (TTM)1.63%
Revenue growth 3Y1.7%
Revenue growth 5Y-3.12%
Sales Q2Q%5.4%
3.2 Future
TEF is expected to show a decrease in Earnings Per Share. In the coming years, the EPS will decrease by -1.92% yearly.
TEF is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.24% yearly.
EPS Next Y-23.92%
EPS Next 2Y-10.96%
EPS Next 3Y-4.96%
EPS Next 5Y-1.92%
Revenue Next Year-0.4%
Revenue Next 2Y0.25%
Revenue Next 3Y0.55%
Revenue Next 5Y-0.24%
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 10.91, the valuation of TEF can be described as very reasonable.
TEF's Price/Earnings ratio is a bit cheaper when compared to the industry. TEF is cheaper than 75.00% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.29. TEF is valued rather cheaply when compared to this.
With a Price/Forward Earnings ratio of 14.22, TEF is valued correctly.
71.88% of the companies in the same industry are more expensive than TEF, based on the Price/Forward Earnings ratio.
TEF is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.08, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.91 | ||
| Fwd PE | 14.22 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, TEF is valued cheaply inside the industry as 84.38% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.96 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
A cheap valuation may be justified as TEF's earnings are expected to decrease with -4.96% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-10.96%
EPS Next 3Y-4.96%
5. Dividend
5.1 Amount
TEF has a Yearly Dividend Yield of 5.61%, which is a nice return.
TEF's Dividend Yield is rather good when compared to the industry average which is at 5.15. TEF pays more dividend than 81.25% of the companies in the same industry.
TEF's Dividend Yield is rather good when compared to the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.61% |
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.
The dividend of TEF decreased recently.
Dividend Growth(5Y)-5.71%
Div Incr Years1
Div Non Decr Years1
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.
The Dividend Rate of TEF has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP-593.4%
EPS Next 2Y-10.96%
EPS Next 3Y-4.96%
4.91
+0.11 (+2.29%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners28.66%
Inst Owner Change0%
Ins Owners0.4%
Ins Owner ChangeN/A
Market Cap27.71B
Analysts54.84
Price Target4.59 (-6.52%)
Short Float %0.2%
Short Ratio11.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.61% |
Yearly Dividend0.38
Dividend Growth(5Y)-5.71%
DP-593.4%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-16.24%
Min EPS beat(2)-51.51%
Max EPS beat(2)19.03%
EPS beat(4)3
Avg EPS beat(4)6.28%
Min EPS beat(4)-51.51%
Max EPS beat(4)36.57%
EPS beat(8)6
Avg EPS beat(8)3.94%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)-0.43%
Min Revenue beat(2)-1.43%
Max Revenue beat(2)0.57%
Revenue beat(4)3
Avg Revenue beat(4)2.6%
Min Revenue beat(4)-1.43%
Max Revenue beat(4)10.07%
Revenue beat(8)4
Avg Revenue beat(8)1.31%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)4.59%
PT rev (3m)3.23%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.47%
EPS NY rev (3m)-6.25%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.91 | ||
| Fwd PE | 14.22 | ||
| P/S | 0.59 | ||
| P/FCF | 4.96 | ||
| P/OCF | 2.34 | ||
| P/B | 1.26 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)0.45
EY9.16%
EPS(NY)0.35
Fwd EY7.03%
FCF(TTM)0.99
FCFY20.15%
OCF(TTM)2.1
OCFY42.79%
SpS8.32
BVpS3.89
TBVpS-1.41
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.32% | ||
| ROE | -1.64% | ||
| ROCE | 3.22% | ||
| ROIC | 2.54% | ||
| ROICexc | 2.87% | ||
| ROICexgc | 4.76% | ||
| OM | 5.82% | ||
| PM (TTM) | N/A | ||
| GM | 49.39% | ||
| FCFM | 11.9% |
ROA(3y)0.08%
ROA(5y)1.74%
ROE(3y)0.1%
ROE(5y)9.53%
ROIC(3y)3.43%
ROIC(5y)3.52%
ROICexc(3y)3.84%
ROICexc(5y)3.95%
ROICexgc(3y)6.39%
ROICexgc(5y)6.59%
ROCE(3y)4.35%
ROCE(5y)4.46%
ROICexcg growth 3Y26.02%
ROICexcg growth 5Y3.81%
ROICexc growth 3Y25.08%
ROICexc growth 5Y8.63%
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%
F-Score6
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 9.58 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | 13.36% | ||
| Interest Coverage | -2.27 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.83 | ||
| Altman-Z | 0.96 |
F-Score6
WACC3.95%
ROIC/WACC0.64
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)13.84%
Cap/Sales(5y)14.7%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)11.11%
EPS 3YN/A
EPS 5Y-8.75%
EPS Q2Q%-50%
EPS Next Y-23.92%
EPS Next 2Y-10.96%
EPS Next 3Y-4.96%
EPS Next 5Y-1.92%
Revenue 1Y (TTM)1.63%
Revenue growth 3Y1.7%
Revenue growth 5Y-3.12%
Sales Q2Q%5.4%
Revenue Next Year-0.4%
Revenue Next 2Y0.25%
Revenue Next 3Y0.55%
Revenue Next 5Y-0.24%
EBIT growth 1Y-42.5%
EBIT growth 3Y20.77%
EBIT growth 5Y4.69%
EBIT Next Year186.65%
EBIT Next 3Y42.49%
EBIT Next 5Y23.68%
FCF growth 1Y8.31%
FCF growth 3Y6.37%
FCF growth 5Y-7.72%
OCF growth 1Y0.45%
OCF growth 3Y0.61%
OCF growth 5Y-7%