TELUS CORP (TU) Stock Fundamental Analysis
NYSE:TU - New York Stock Exchange, Inc. - CA87971M1032 - Common Stock - Currency: USD
We assign a fundamental rating of 3 out of 10 to TU. TU was compared to 31 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. While showing a medium growth rate, TU is valued expensive at the moment.
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.
In the past 5 years TU always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 1.62%, TU is doing good in the industry, outperforming 63.33% of the companies in the same industry.
TU has a Return On Equity (5.85%) which is comparable to the rest of the industry.
With a decent Return On Invested Capital value of 5.08%, TU is doing good in the industry, outperforming 63.33% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TU is in line with the industry average of 5.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.62% | ||
| ROE | 5.85% | ||
| ROIC | 5.08% |
ROA(3y)2.64%
ROA(5y)3.06%
ROE(3y)8.64%
ROE(5y)10.5%
ROIC(3y)5.49%
ROIC(5y)5.87%
1.3 Margins
Looking at the Profit Margin, with a value of 4.62%, TU is in the better half of the industry, outperforming 63.33% of the companies in the same industry.
TU's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 16.24%, TU is in the better half of the industry, outperforming 70.00% of the companies in the same industry.
In the last couple of years the Operating Margin of TU has declined.
The Gross Margin of TU (63.01%) is better than 66.67% of its industry peers.
TU's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 16.24% | ||
| PM (TTM) | 4.62% | ||
| GM | 63.01% |
OM growth 3Y-5.65%
OM growth 5Y-5.08%
PM growth 3Y-18.85%
PM growth 5Y-18.02%
GM growth 3Y1.54%
GM growth 5Y2.91%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TU is destroying value.
Compared to 1 year ago, TU has more shares outstanding
TU has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, TU has a worse debt to assets ratio.
2.2 Solvency
TU has an Altman-Z score of 0.97. This is a bad value and indicates that TU is not financially healthy and even has some risk of bankruptcy.
With a decent Altman-Z score value of 0.97, TU is doing good in the industry, outperforming 63.33% of the companies in the same industry.
TU has a debt to FCF ratio of 30.67. This is a negative value and a sign of low solvency as TU would need 30.67 years to pay back of all of its debts.
TU has a Debt to FCF ratio of 30.67. This is in the lower half of the industry: TU underperforms 60.00% of its industry peers.
A Debt/Equity ratio of 1.67 is on the high side and indicates that TU has dependencies on debt financing.
The Debt to Equity ratio of TU (1.67) is worse than 63.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.67 | ||
| Debt/FCF | 30.67 | ||
| Altman-Z | 0.97 |
ROIC/WACC0.87
WACC5.81%
2.3 Liquidity
A Current Ratio of 0.69 indicates that TU may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.69, TU is doing worse than 86.67% of the companies in the same industry.
TU has a Quick Ratio of 0.69. This is a bad value and indicates that TU is not financially healthy enough and could expect problems in meeting its short term obligations.
TU has a Quick ratio of 0.63. This is amonst the worse of the industry: TU underperforms 86.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.63 |
3. Growth
3.1 Past
TU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.57%, which is quite good.
TU shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.85% yearly.
TU shows a small growth in Revenue. In the last year, the Revenue has grown by 0.46%.
TU shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.25% yearly.
EPS 1Y (TTM)9.57%
EPS 3Y-3.89%
EPS 5Y-7.85%
EPS Q2Q%12%
Revenue 1Y (TTM)0.46%
Revenue growth 3Y9.25%
Revenue growth 5Y7.25%
Sales Q2Q%1.82%
3.2 Future
Based on estimates for the next years, TU will show a quite strong growth in Earnings Per Share. The EPS will grow by 19.50% on average per year.
Based on estimates for the next years, TU will show a small growth in Revenue. The Revenue will grow by 2.77% on average per year.
EPS Next Y8.29%
EPS Next 2Y6.83%
EPS Next 3Y9.56%
EPS Next 5Y19.5%
Revenue Next Year0.3%
Revenue Next 2Y1.15%
Revenue Next 3Y1.88%
Revenue Next 5Y2.77%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 20.01, TU is valued on the expensive side.
66.67% of the companies in the same industry are more expensive than TU, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TU to the average of the S&P500 Index (28.58), we can say TU is valued slightly cheaper.
TU is valuated rather expensively with a Price/Forward Earnings ratio of 19.06.
TU's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 24.47. TU is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.01 | ||
| Fwd PE | 19.06 |
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 is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.87 | ||
| EV/EBITDA | 7.89 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates TU does not grow enough to justify the current Price/Earnings ratio.
TU has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.41
PEG (5Y)N/A
EPS Next 2Y6.83%
EPS Next 3Y9.56%
5. Dividend
5.1 Amount
TU has a Yearly Dividend Yield of 7.92%, which is a nice return.
Compared to an average industry Dividend Yield of 5.32, TU pays a better dividend. On top of this TU pays more dividend than 93.33% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, TU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.92% |
5.2 History
The dividend of TU decreases each year by -1.08%.
TU has been paying a dividend for at least 10 years, so it has a reliable track record.
TU has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)-1.08%
Div Incr Years21
Div Non Decr Years21
5.3 Sustainability
TU pays out 163.92% of its income as dividend. This is not a sustainable payout ratio.
DP163.92%
EPS Next 2Y6.83%
EPS Next 3Y9.56%
TELUS CORP
NYSE:TU (1/27/2025, 11:47:09 AM)
14.41
+0.26 (+1.84%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners56.27%
Inst Owner Change1.51%
Ins Owners0.02%
Ins Owner ChangeN/A
Market Cap21.62B
Analysts73.91
Price Target17.12 (18.81%)
Short Float %2.67%
Short Ratio11.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.92% |
Yearly Dividend0.91
Dividend Growth(5Y)-1.08%
DP163.92%
Div Incr Years21
Div Non Decr Years21
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)14.75%
Min EPS beat(2)12.95%
Max EPS beat(2)16.54%
EPS beat(4)4
Avg EPS beat(4)10%
Min EPS beat(4)1.7%
Max EPS beat(4)16.54%
EPS beat(8)6
Avg EPS beat(8)0.9%
EPS beat(12)8
Avg EPS beat(12)0.21%
EPS beat(16)9
Avg EPS beat(16)-1.11%
Revenue beat(2)0
Avg Revenue beat(2)-1.75%
Min Revenue beat(2)-2.62%
Max Revenue beat(2)-0.87%
Revenue beat(4)0
Avg Revenue beat(4)-2.76%
Min Revenue beat(4)-4.74%
Max Revenue beat(4)-0.87%
Revenue beat(8)0
Avg Revenue beat(8)-2.29%
Revenue beat(12)1
Avg Revenue beat(12)-2.27%
Revenue beat(16)1
Avg Revenue beat(16)-2.08%
PT rev (1m)-3.46%
PT rev (3m)-7.57%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-19.51%
EPS NY rev (1m)0%
EPS NY rev (3m)2.12%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.85%
Revenue NY rev (1m)-0.06%
Revenue NY rev (3m)-0.04%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.01 | ||
| Fwd PE | 19.06 | ||
| P/S | 1.55 | ||
| P/FCF | 32.87 | ||
| P/OCF | 6.1 | ||
| P/B | 1.97 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.89 |
EPS(TTM)0.72
EY5%
EPS(NY)0.76
Fwd EY5.25%
FCF(TTM)0.44
FCFY3.04%
OCF(TTM)2.36
OCFY16.4%
SpS9.28
BVpS7.33
TBVpS-7.01
PEG (NY)2.41
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.62% | ||
| ROE | 5.85% | ||
| ROCE | 6.74% | ||
| ROIC | 5.08% | ||
| ROICexc | 5.17% | ||
| ROICexgc | 14.35% | ||
| OM | 16.24% | ||
| PM (TTM) | 4.62% | ||
| GM | 63.01% | ||
| FCFM | 4.72% |
ROA(3y)2.64%
ROA(5y)3.06%
ROE(3y)8.64%
ROE(5y)10.5%
ROIC(3y)5.49%
ROIC(5y)5.87%
ROICexc(3y)5.6%
ROICexc(5y)5.98%
ROICexgc(3y)15.45%
ROICexgc(5y)15.6%
ROCE(3y)7.17%
ROCE(5y)7.66%
ROICexcg growth 3Y-0.69%
ROICexcg growth 5Y-3.68%
ROICexc growth 3Y-4.39%
ROICexc growth 5Y-7.84%
OM growth 3Y-5.65%
OM growth 5Y-5.08%
PM growth 3Y-18.85%
PM growth 5Y-18.02%
GM growth 3Y1.54%
GM growth 5Y2.91%
F-Score5
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.67 | ||
| Debt/FCF | 30.67 | ||
| Debt/EBITDA | 3.6 | ||
| Cap/Depr | 101.85% | ||
| Cap/Sales | 20.74% | ||
| Interest Coverage | 2.46 | ||
| Cash Conversion | 69.57% | ||
| Profit Quality | 102.17% | ||
| Current Ratio | 0.69 | ||
| Quick Ratio | 0.63 | ||
| Altman-Z | 0.97 |
F-Score5
WACC5.81%
ROIC/WACC0.87
Cap/Depr(3y)136.39%
Cap/Depr(5y)137.77%
Cap/Sales(3y)26.32%
Cap/Sales(5y)26.11%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.57%
EPS 3Y-3.89%
EPS 5Y-7.85%
EPS Q2Q%12%
EPS Next Y8.29%
EPS Next 2Y6.83%
EPS Next 3Y9.56%
EPS Next 5Y19.5%
Revenue 1Y (TTM)0.46%
Revenue growth 3Y9.25%
Revenue growth 5Y7.25%
Sales Q2Q%1.82%
Revenue Next Year0.3%
Revenue Next 2Y1.15%
Revenue Next 3Y1.88%
Revenue Next 5Y2.77%
EBIT growth 1Y9.56%
EBIT growth 3Y3.08%
EBIT growth 5Y1.81%
EBIT Next Year156.71%
EBIT Next 3Y40.87%
EBIT Next 5Y24.23%
FCF growth 1Y171.44%
FCF growth 3Y-11.76%
FCF growth 5Y-3.14%
OCF growth 1Y10.98%
OCF growth 3Y-0.55%
OCF growth 5Y2.08%