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%)
Overall TEF gets a fundamental rating of 4 out of 10. We evaluated TEF against 36 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.
- In multiple years TEF reported negative net income over the last 5 years.
- In the past 5 years TEF always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of -4.10%, TEF is doing worse than 63.16% of the companies in the same industry.
- TEF has a Return On Equity of -21.56%. This is in the lower half of the industry: TEF underperforms 71.05% of its industry peers.
- The Return On Invested Capital of TEF (7.73%) is better than 84.21% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for TEF is below the industry average of 6.71%.
- 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
- TEF has a Operating Margin of 12.00%. This is comparable to the rest of the industry: TEF outperforms 55.26% of its industry peers.
- In the last couple of years the Operating Margin of TEF has grown nicely.
- With a Gross Margin value of 35.73%, TEF is not doing good in the industry: 78.95% of the companies in the same industry are doing better.
- TEF's Gross Margin has been stable in the last couple of years.
| 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.
- The number of shares outstanding for TEF remains at a similar level compared to 1 year ago.
- Compared to 5 years ago, TEF has less shares outstanding
- 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 68.42% 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.
- TEF's Debt to Equity ratio of 2.07 is on the low side compared to the rest of the industry. TEF is outperformed by 71.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.07 | ||
| Debt/FCF | 8.8 | ||
| Altman-Z | N/A |
ROIC/WACC1.79
WACC4.31%
2.3 Liquidity
- TEF has a Current Ratio of 0.84. This is a bad value and indicates that TEF is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Current ratio of TEF (0.84) is worse than 73.68% of its industry peers.
- TEF has a Quick Ratio of 0.84. 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 0.80 is on the low side compared to the rest of the industry. TEF is outperformed by 76.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
- TEF shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -34.78%.
- Measured over the past years, TEF shows a decrease in Earnings Per Share. The EPS has been decreasing by -8.73% on average per year.
- The Revenue has grown by 40.77% in the past year. This is a very strong growth!
- Measured over the past years, TEF shows a decrease in Revenue. The Revenue has been decreasing by -3.12% on average per year.
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.
- Based on estimates for the next years, TEF will show a decrease in Revenue. The Revenue will decrease by -1.34% on average per year.
EPS Next Y-37.45%
EPS Next 2Y-9.99%
EPS Next 3Y-2.86%
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
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
- 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
- A Price/Earnings ratio of 10.89 indicates a reasonable valuation of TEF.
- Based on the Price/Earnings ratio, TEF is valued cheaply inside the industry as 84.21% of the companies are valued more expensively.
- Compared to an average S&P500 Price/Earnings ratio of 28.60, TEF is valued rather cheaply.
- A Price/Forward Earnings ratio of 10.01 indicates a reasonable valuation of TEF.
- Based on the Price/Forward Earnings ratio, TEF is valued cheaper than 86.84% of the companies in the same industry.
- TEF is valuated cheaply when we compare the Price/Forward Earnings ratio to 25.83, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.89 | ||
| Fwd PE | 10.01 |
4.2 Price Multiples
- Based on the Price/Free Cash Flow ratio, TEF is valued cheaper than 97.37% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.75 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- TEF's earnings are expected to decrease with -2.86% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-9.99%
EPS Next 3Y-2.86%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 7.35%, 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 2.29. TEF pays more dividend than 92.11% of the companies in the same industry.
- TEF's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.35% |
5.2 History
- The dividend of TEF decreases each year by -5.71%.
- TEF has paid a dividend for at least 10 years, which is 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-9.99%
EPS Next 3Y-2.86%
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 -37.45% in the next year.