TELUS CORP (TU) Stock Fundamental Analysis
NYSE:TU - New York Stock Exchange, Inc. - CA87971M1032 - Common Stock - Currency: USD
Taking everything into account, TU scores 4 out of 10 in our fundamental rating. TU was compared to 31 industry peers in the Diversified Telecommunication Services industry. While TU is still in line with the averages on profitability rating, there are concerns on its financial health. TU is quite expensive at the moment. It does show a decent growth rate. Finally TU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
TU had positive earnings in the past year.
TU had a positive operating cash flow in the past year.
In the past 5 years TU has always been profitable.
Each year in the past 5 years TU had a positive operating cash flow.
1.2 Ratios
TU's Return On Assets of 1.71% is fine compared to the rest of the industry. TU outperforms 63.33% of its industry peers.
Looking at the Return On Equity, with a value of 6.36%, TU is in line with its industry, outperforming 56.67% of the companies in the same industry.
TU has a better Return On Invested Capital (5.04%) than 66.67% 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 5.71%.
| 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
With a decent Profit Margin value of 4.93%, TU is doing good in the industry, outperforming 63.33% of the companies in the same industry.
TU's Profit Margin has declined in the last couple of years.
TU has a better Operating Margin (15.76%) than 70.00% of its industry peers.
In the last couple of years the Operating Margin of TU has declined.
The Gross Margin of TU (62.97%) is better than 66.67% 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
TU 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, TU has more shares outstanding
Compared to 5 years ago, TU has more shares outstanding
The debt/assets ratio for TU is higher compared to a year ago.
2.2 Solvency
TU has an Altman-Z score of 0.98. 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 0.98, TU is doing good in the industry, outperforming 66.67% of the companies in the same industry.
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 has a Debt to FCF ratio of 56.93. This is in the lower half of the industry: TU underperforms 63.33% 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.
The Debt to Equity ratio of TU (1.70) is worse than 63.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.7 | ||
| Debt/FCF | 56.93 | ||
| Altman-Z | 0.98 |
ROIC/WACC0.85
WACC5.96%
2.3 Liquidity
TU has a Current Ratio of 0.68. 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's Current ratio of 0.68 is on the low side compared to the rest of the industry. TU is outperformed by 76.67% of its industry peers.
A Quick Ratio of 0.61 indicates that TU may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.61, TU is doing worse than 83.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.68 | ||
| Quick Ratio | 0.61 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.24% over the past year.
TU shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -6.10% yearly.
The Revenue has been growing slightly by 0.67% in the past year.
TU shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.66% yearly.
EPS 1Y (TTM)10.24%
EPS 3Y-0.09%
EPS 5Y-6.1%
EPS Q2Q%7.21%
Revenue 1Y (TTM)0.67%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%5.74%
3.2 Future
The Earnings Per Share is expected to grow by 21.82% on average over the next years. This is a very strong growth
TU is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.28% yearly.
EPS Next Y-1.63%
EPS Next 2Y6.82%
EPS Next 3Y10.24%
EPS Next 5Y21.82%
Revenue Next Year2.99%
Revenue Next 2Y3.03%
Revenue Next 3Y3.26%
Revenue Next 5Y3.28%
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
With a Price/Earnings ratio of 21.42, TU is valued on the expensive side.
The rest of the industry has a similar Price/Earnings ratio as TU.
TU's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 29.36.
A Price/Forward Earnings ratio of 21.65 indicates a rather expensive valuation of TU.
TU's Price/Forward Earnings ratio is in line with the industry average.
TU's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.65.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.42 | ||
| Fwd PE | 21.65 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as TU.
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 | 64.12 | ||
| EV/EBITDA | 8.56 |
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 2Y6.82%
EPS Next 3Y10.24%
5. Dividend
5.1 Amount
TU has a Yearly Dividend Yield of 7.37%, which is a nice return.
Compared to an average industry Dividend Yield of 4.81, 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 | 7.37% |
5.2 History
The dividend of TU has a limited annual growth rate of 1.90%.
TU has been paying a dividend for at least 10 years, so it has a reliable track record.
TU has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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 2Y6.82%
EPS Next 3Y10.24%
15.64
-0.08 (-0.51%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners57.34%
Inst Owner Change-76.15%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap23.52B
Analysts74.17
Price Target16.25 (3.9%)
Short Float %2.89%
Short Ratio11.34
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.37% |
Yearly Dividend1.05
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)15.26%
Min EPS beat(2)13.98%
Max EPS beat(2)16.54%
EPS beat(4)4
Avg EPS beat(4)13.07%
Min EPS beat(4)8.8%
Max EPS beat(4)16.54%
EPS beat(8)7
Avg EPS beat(8)5.24%
EPS beat(12)9
Avg EPS beat(12)2.37%
EPS beat(16)10
Avg EPS beat(16)0.55%
Revenue beat(2)1
Avg Revenue beat(2)1.05%
Min Revenue beat(2)-0.87%
Max Revenue beat(2)2.97%
Revenue beat(4)1
Avg Revenue beat(4)-1.32%
Min Revenue beat(4)-4.74%
Max Revenue beat(4)2.97%
Revenue beat(8)1
Avg Revenue beat(8)-1.66%
Revenue beat(12)1
Avg Revenue beat(12)-2.08%
Revenue beat(16)2
Avg Revenue beat(16)-1.79%
PT rev (1m)-5.04%
PT rev (3m)-10.08%
EPS NQ rev (1m)-3.76%
EPS NQ rev (3m)-10.98%
EPS NY rev (1m)-4.97%
EPS NY rev (3m)-5.01%
Revenue NQ rev (1m)-1.43%
Revenue NQ rev (3m)-1.91%
Revenue NY rev (1m)1.05%
Revenue NY rev (3m)0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.42 | ||
| Fwd PE | 21.65 | ||
| P/S | 1.67 | ||
| P/FCF | 64.12 | ||
| P/OCF | 6.92 | ||
| P/B | 2.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.56 |
EPS(TTM)0.73
EY4.67%
EPS(NY)0.72
Fwd EY4.62%
FCF(TTM)0.24
FCFY1.56%
OCF(TTM)2.26
OCFY14.45%
SpS9.39
BVpS7.29
TBVpS-7.24
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 | 0.98 |
F-Score5
WACC5.96%
ROIC/WACC0.85
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)10.24%
EPS 3Y-0.09%
EPS 5Y-6.1%
EPS Q2Q%7.21%
EPS Next Y-1.63%
EPS Next 2Y6.82%
EPS Next 3Y10.24%
EPS Next 5Y21.82%
Revenue 1Y (TTM)0.67%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%5.74%
Revenue Next Year2.99%
Revenue Next 2Y3.03%
Revenue Next 3Y3.26%
Revenue Next 5Y3.28%
EBIT growth 1Y6.3%
EBIT growth 3Y-0.51%
EBIT growth 5Y0.7%
EBIT Next Year155.88%
EBIT Next 3Y40.7%
EBIT Next 5Y23.95%
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%