TELENOR ASA (TEL.OL) Stock Fundamental Analysis
Europe - Euronext Oslo - OSL:TEL - NO0010063308 - Common Stock
157 NOK
+2.1 (+1.36%)
Overall TEL gets a fundamental rating of 5 out of 10. We evaluated TEL against 35 industry peers in the Diversified Telecommunication Services industry. TEL scores excellent on profitability, but there are some minor concerns on its financial health. TEL has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
- In the past year TEL was profitable.
- In the past year TEL had a positive cash flow from operations.
- In the past 5 years TEL has always been profitable.
- Each year in the past 5 years TEL had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of TEL (4.47%) is better than 65.71% of its industry peers.
- TEL has a Return On Equity of 14.79%. This is comparable to the rest of the industry: TEL outperforms 60.00% of its industry peers.
- TEL has a Return On Invested Capital of 8.58%. This is in the better half of the industry: TEL outperforms 77.14% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for TEL is in line with the industry average of 8.42%.
- The 3 year average ROIC (7.81%) for TEL is below the current ROIC(8.58%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.47% | ||
| ROE | 14.79% | ||
| ROIC | 8.58% |
ROA(3y)11.03%
ROA(5y)8.1%
ROE(3y)40.05%
ROE(5y)34.24%
ROIC(3y)7.81%
ROIC(5y)8.57%
1.3 Margins
- The Profit Margin of TEL (12.26%) is better than 71.43% of its industry peers.
- TEL's Profit Margin has improved in the last couple of years.
- TEL's Operating Margin of 23.18% is amongst the best of the industry. TEL outperforms 82.86% of its industry peers.
- In the last couple of years the Operating Margin of TEL has remained more or less at the same level.
- With a decent Gross Margin value of 78.29%, TEL is doing good in the industry, outperforming 77.14% of the companies in the same industry.
- TEL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.18% | ||
| PM (TTM) | 12.26% | ||
| GM | 78.29% |
OM growth 3Y4.24%
OM growth 5Y-0.38%
PM growth 3Y144.33%
PM growth 5Y27.39%
GM growth 3Y1.85%
GM growth 5Y0.62%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), TEL is creating some value.
- The number of shares outstanding for TEL has been reduced compared to 1 year ago.
- Compared to 5 years ago, TEL has less shares outstanding
- The debt/assets ratio for TEL has been reduced compared to a year ago.
2.2 Solvency
- TEL has an Altman-Z score of 1.73. This is a bad value and indicates that TEL is not financially healthy and even has some risk of bankruptcy.
- The Altman-Z score of TEL (1.73) is better than 82.86% of its industry peers.
- The Debt to FCF ratio of TEL is 5.37, which is a neutral value as it means it would take TEL, 5.37 years of fcf income to pay off all of its debts.
- With an excellent Debt to FCF ratio value of 5.37, TEL belongs to the best of the industry, outperforming 82.86% of the companies in the same industry.
- A Debt/Equity ratio of 1.23 is on the high side and indicates that TEL has dependencies on debt financing.
- Looking at the Debt to Equity ratio, with a value of 1.23, TEL is doing worse than 60.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.23 | ||
| Debt/FCF | 5.37 | ||
| Altman-Z | 1.73 |
ROIC/WACC1.22
WACC7.04%
2.3 Liquidity
- A Current Ratio of 0.52 indicates that TEL may have some problems paying its short term obligations.
- TEL's Current ratio of 0.52 is on the low side compared to the rest of the industry. TEL is outperformed by 85.71% of its industry peers.
- A Quick Ratio of 0.51 indicates that TEL may have some problems paying its short term obligations.
- TEL has a Quick ratio of 0.51. This is amonst the worse of the industry: TEL underperforms 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.51 |
3. Growth
3.1 Past
- TEL shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -40.98%.
- TEL shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.44% yearly.
- The Revenue has been growing slightly by 0.57% in the past year.
- TEL shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -6.80% yearly.
EPS 1Y (TTM)-40.98%
EPS 3Y23.32%
EPS 5Y7.44%
EPS Q2Q%-25.1%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y-6.3%
Revenue growth 5Y-6.8%
Sales Q2Q%1.33%
3.2 Future
- Based on estimates for the next years, TEL will show a decrease in Earnings Per Share. The EPS will decrease by -3.77% on average per year.
- The Revenue is expected to grow by 0.58% on average over the next years.
EPS Next Y-36.77%
EPS Next 2Y-13.34%
EPS Next 3Y-5.78%
EPS Next 5Y-3.77%
Revenue Next Year0.35%
Revenue Next 2Y0.42%
Revenue Next 3Y0.83%
Revenue Next 5Y0.58%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less 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 20.77, TEL is valued on the expensive side.
- TEL's Price/Earnings ratio is in line with the industry average.
- TEL is valuated rather cheaply when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- Based on the Price/Forward Earnings ratio of 15.58, the valuation of TEL can be described as correct.
- Compared to the rest of the industry, the Price/Forward Earnings ratio of TEL is on the same level as its industry peers.
- When comparing the Price/Forward Earnings ratio of TEL to the average of the S&P500 Index (25.98), we can say TEL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.77 | ||
| Fwd PE | 15.58 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, TEL is valued a bit more expensive than 68.57% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, TEL is valued a bit cheaper than 62.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.6 | ||
| EV/EBITDA | 8.37 |
4.3 Compensation for Growth
- The decent profitability rating of TEL may justify a higher PE ratio.
- A cheap valuation may be justified as TEL's earnings are expected to decrease with -5.78% in the coming years.
PEG (NY)N/A
PEG (5Y)2.79
EPS Next 2Y-13.34%
EPS Next 3Y-5.78%
5. Dividend
5.1 Amount
- TEL has a Yearly Dividend Yield of 6.13%, which is a nice return.
- Compared to an average industry Dividend Yield of 3.26, TEL pays a better dividend. On top of this TEL pays more dividend than 82.86% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, TEL pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.13% |
5.2 History
- The dividend of TEL has a limited annual growth rate of 2.70%.
Dividend Growth(5Y)2.7%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 131.16% of the earnings are spent on dividend by TEL. This is not a sustainable payout ratio.
- The Dividend Rate of TEL has been growing, while earnings will be declining. This means the dividend growth is most likely not sustainable.
DP131.16%
EPS Next 2Y-13.34%
EPS Next 3Y-5.78%
TELENOR ASA / TEL.OL FAQ
Can you provide the ChartMill fundamental rating for TELENOR ASA?
ChartMill assigns a fundamental rating of 5 / 10 to TEL.OL.
What is the valuation status for TEL stock?
ChartMill assigns a valuation rating of 4 / 10 to TELENOR ASA (TEL.OL). This can be considered as Fairly Valued.
Can you provide the profitability details for TELENOR ASA?
TELENOR ASA (TEL.OL) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for TEL stock?
The Price/Earnings (PE) ratio for TELENOR ASA (TEL.OL) is 20.77 and the Price/Book (PB) ratio is 3.21.
How sustainable is the dividend of TELENOR ASA (TEL.OL) stock?
The dividend rating of TELENOR ASA (TEL.OL) is 6 / 10 and the dividend payout ratio is 131.16%.