TELUS CORP (TU) Stock Fundamental Analysis
NYSE:TU - New York Stock Exchange, Inc. - CA87971M1032 - Common Stock - Currency: USD
TU gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 32 industry peers in the Diversified Telecommunication Services industry. There are concerns on the financial health of TU while its profitability can be described as average. TU is valied quite expensively at the moment, while it does show a decent growth rate. TU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
TU had positive earnings in the past year.
In the past year TU had a positive cash flow from operations.
In the past 5 years TU has always been profitable.
TU had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of TU (1.71%) is better than 68.75% of its industry peers.
The Return On Equity of TU (6.36%) is better than 68.75% of its industry peers.
TU has a better Return On Invested Capital (5.04%) than 68.75% of its industry peers.
TU had an Average Return On Invested Capital over the past 3 years of 5.16%. This is in line with the industry average of 5.49%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.71% | ||
| ROE | 6.36% | ||
| ROIC | 5.04% |
ROA(3y)2.07%
ROA(5y)2.49%
ROE(3y)7.11%
ROE(5y)8.46%
ROIC(3y)5.16%
ROIC(5y)5.5%
1.3 Margins
TU has a better Profit Margin (4.93%) than 68.75% of its industry peers.
TU's Profit Margin has declined in the last couple of years.
TU has a better Operating Margin (15.76%) than 71.88% of its industry peers.
In the last couple of years the Operating Margin of TU has declined.
TU has a better Gross Margin (62.97%) than 68.75% of its industry peers.
TU's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.76% | ||
| PM (TTM) | 4.93% | ||
| GM | 62.97% |
OM growth 3Y-6.27%
OM growth 5Y-5.58%
PM growth 3Y-20.54%
PM growth 5Y-16.25%
GM growth 3Y1.26%
GM growth 5Y1.39%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TU is destroying value.
Compared to 1 year ago, TU has more shares outstanding
Compared to 5 years ago, TU has more shares outstanding
TU has a worse debt/assets ratio than last year.
2.2 Solvency
TU has an Altman-Z score of 0.94. This is a bad value and indicates that TU is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of TU (0.94) is better than 65.63% of its industry peers.
TU has a debt to FCF ratio of 56.93. This is a negative value and a sign of low solvency as TU would need 56.93 years to pay back of all of its debts.
TU's Debt to FCF ratio of 56.93 is on the low side compared to the rest of the industry. TU is outperformed by 68.75% of its industry peers.
A Debt/Equity ratio of 1.70 is on the high side and indicates that TU has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.70, TU is doing worse than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | 56.93 | ||
| Altman-Z | 0.94 |
ROIC/WACC0.88
WACC5.76%
2.3 Liquidity
A Current Ratio of 0.68 indicates that TU may have some problems paying its short term obligations.
The Current ratio of TU (0.68) is worse than 75.00% of its industry peers.
A Quick Ratio of 0.61 indicates that TU may have some problems paying its short term obligations.
The Quick ratio of TU (0.61) is worse than 81.25% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.61 |
3. Growth
3.1 Past
TU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.47%, which is quite good.
The Earnings Per Share has been decreasing by -6.24% on average over the past years.
The Revenue has been growing slightly by 0.67% in the past year.
The Revenue has been growing slightly by 6.66% on average over the past years.
EPS 1Y (TTM)9.47%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%4.17%
Revenue 1Y (TTM)0.67%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%3.52%
3.2 Future
TU is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 15.96% yearly.
Based on estimates for the next years, TU will show a small growth in Revenue. The Revenue will grow by 2.31% on average per year.
EPS Next Y-0.55%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
EPS Next 5Y15.96%
Revenue Next Year3.41%
Revenue Next 2Y3.26%
Revenue Next 3Y3.26%
Revenue Next 5Y2.31%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 20.01, which indicates a rather expensive current valuation of TU.
62.50% of the companies in the same industry are more expensive than TU, based on the Price/Earnings ratio.
TU is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
TU is valuated rather expensively with a Price/Forward Earnings ratio of 20.15.
Based on the Price/Forward Earnings ratio, TU is valued a bit cheaper than 68.75% of the companies in the same industry.
TU's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.01 | ||
| Fwd PE | 20.15 |
4.2 Price Multiples
TU's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TU indicates a slightly more expensive valuation: TU is more expensive than 62.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 60.34 | ||
| EV/EBITDA | 8.26 |
4.3 Compensation for Growth
The decent profitability rating of TU may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y4.56%
EPS Next 3Y8.06%
5. Dividend
5.1 Amount
TU has a Yearly Dividend Yield of 7.75%, which is a nice return.
Compared to an average industry Dividend Yield of 5.15, TU pays a better dividend. On top of this TU pays more dividend than 93.75% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.52, TU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.75% |
5.2 History
The dividend of TU has a limited annual growth rate of 1.90%.
TU has paid a dividend for at least 10 years, which is a reliable track record.
TU has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)1.9%
Div Incr Years21
Div Non Decr Years21
5.3 Sustainability
157.30% of the earnings are spent on dividend by TU. This is not a sustainable payout ratio.
TU's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP157.3%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
15.01
+0.25 (+1.69%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners57.34%
Inst Owner Change-0.4%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap22.73B
Analysts70.83
Price Target15.72 (4.73%)
Short Float %2.58%
Short Ratio10.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.75% |
Yearly Dividend0.76
Dividend Growth(5Y)1.9%
DP157.3%
Div Incr Years21
Div Non Decr Years21
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.86%
Min EPS beat(2)11.18%
Max EPS beat(2)16.54%
EPS beat(4)4
Avg EPS beat(4)12.37%
Min EPS beat(4)8.8%
Max EPS beat(4)16.54%
EPS beat(8)7
Avg EPS beat(8)4.89%
EPS beat(12)9
Avg EPS beat(12)2.14%
EPS beat(16)10
Avg EPS beat(16)0.38%
Revenue beat(2)1
Avg Revenue beat(2)-0.05%
Min Revenue beat(2)-0.87%
Max Revenue beat(2)0.77%
Revenue beat(4)1
Avg Revenue beat(4)-1.87%
Min Revenue beat(4)-4.74%
Max Revenue beat(4)0.77%
Revenue beat(8)1
Avg Revenue beat(8)-1.94%
Revenue beat(12)1
Avg Revenue beat(12)-2.26%
Revenue beat(16)2
Avg Revenue beat(16)-1.93%
PT rev (1m)-1.89%
PT rev (3m)-8.17%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)-9.29%
EPS NY rev (1m)0.4%
EPS NY rev (3m)-4.6%
Revenue NQ rev (1m)-0.57%
Revenue NQ rev (3m)-1.47%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.01 | ||
| Fwd PE | 20.15 | ||
| P/S | 1.57 | ||
| P/FCF | 60.34 | ||
| P/OCF | 6.51 | ||
| P/B | 2.02 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.26 |
EPS(TTM)0.75
EY5%
EPS(NY)0.74
Fwd EY4.96%
FCF(TTM)0.25
FCFY1.66%
OCF(TTM)2.31
OCFY15.36%
SpS9.58
BVpS7.43
TBVpS-7.38
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.71% | ||
| ROE | 6.36% | ||
| ROCE | 6.59% | ||
| ROIC | 5.04% | ||
| ROICexc | 5.13% | ||
| ROICexgc | 14.47% | ||
| OM | 15.76% | ||
| PM (TTM) | 4.93% | ||
| GM | 62.97% | ||
| FCFM | 2.6% |
ROA(3y)2.07%
ROA(5y)2.49%
ROE(3y)7.11%
ROE(5y)8.46%
ROIC(3y)5.16%
ROIC(5y)5.5%
ROICexc(3y)5.26%
ROICexc(5y)5.61%
ROICexgc(3y)14.67%
ROICexgc(5y)15.27%
ROCE(3y)6.66%
ROCE(5y)7.09%
ROICexcg growth 3Y-6.18%
ROICexcg growth 5Y-3.5%
ROICexc growth 3Y-7.23%
ROICexc growth 5Y-7.25%
OM growth 3Y-6.27%
OM growth 5Y-5.58%
PM growth 3Y-20.54%
PM growth 5Y-16.25%
GM growth 3Y1.26%
GM growth 5Y1.39%
F-Score5
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | 56.93 | ||
| Debt/EBITDA | 3.68 | ||
| Cap/Depr | 107.14% | ||
| Cap/Sales | 21.47% | ||
| Interest Coverage | 2.39 | ||
| Cash Conversion | 67.23% | ||
| Profit Quality | 52.67% | ||
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.61 | ||
| Altman-Z | 0.94 |
F-Score5
WACC5.76%
ROIC/WACC0.88
Cap/Depr(3y)107.1%
Cap/Depr(5y)125.25%
Cap/Sales(3y)21.07%
Cap/Sales(5y)24.41%
Profit Quality(3y)62.22%
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.47%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%4.17%
EPS Next Y-0.55%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
EPS Next 5Y15.96%
Revenue 1Y (TTM)0.67%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%3.52%
Revenue Next Year3.41%
Revenue Next 2Y3.26%
Revenue Next 3Y3.26%
Revenue Next 5Y2.31%
EBIT growth 1Y6.3%
EBIT growth 3Y-0.51%
EBIT growth 5Y0.7%
EBIT Next Year150.12%
EBIT Next 3Y39.47%
EBIT Next 5Y23.57%
FCF growth 1Y-39.68%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y7.74%
OCF growth 3Y3.37%
OCF growth 5Y4.3%