TELEFONICA SA-SPON ADR (TEF) Stock Fundamental Analysis
NYSE:TEF - New York Stock Exchange, Inc. - US8793822086 - ADR - Currency: USD
Overall TEF gets a fundamental rating of 3 out of 10. We evaluated TEF against 33 industry peers in the Diversified Telecommunication Services industry. TEF has a medium profitability rating, but doesn't score so well on its financial health evaluation. TEF has a valuation in line with the averages, but it does not seem to be growing.
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.
The reported net income has been mixed in the past 5 years: TEF reported negative net income in multiple years.
Each year in the past 5 years TEF had a positive operating cash flow.
1.2 Ratios
TEF has a Return On Assets of -0.32%. This is comparable to the rest of the industry: TEF outperforms 51.52% of its industry peers.
With a Return On Equity value of -1.64%, TEF perfoms like the industry average, outperforming 51.52% of the companies in the same industry.
TEF has a Return On Invested Capital (2.54%) which is comparable to the rest of the industry.
TEF had an Average Return On Invested Capital over the past 3 years of 3.43%. This is below the industry average of 7.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.32% | ||
| ROE | -1.64% | ||
| ROIC | 2.54% |
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
The Operating Margin of TEF (5.82%) is comparable to the rest of the industry.
TEF's Operating Margin has improved in the last couple of years.
TEF has a Gross Margin of 49.39%. This is comparable to the rest of the industry: TEF outperforms 51.52% of its industry peers.
In the last couple of years the Gross Margin of TEF has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.82% | ||
| PM (TTM) | N/A | ||
| GM | 49.39% |
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 below the Cost of Capital (WACC), which means it is destroying value.
TEF has about the same amout of shares outstanding than it did 1 year ago.
The number of shares outstanding for TEF has been reduced compared to 5 years ago.
The debt/assets ratio for TEF is higher compared to a year ago.
2.2 Solvency
TEF has an Altman-Z score of 0.96. This is a bad value and indicates that TEF is not financially healthy and even has some risk of bankruptcy.
TEF has a Altman-Z score of 0.96. This is in the better half of the industry: TEF outperforms 66.67% of its industry peers.
TEF has a debt to FCF ratio of 9.58. This is a negative value and a sign of low solvency as TEF would need 9.58 years to pay back of all of its debts.
TEF has a Debt to FCF ratio (9.58) which is in line with its industry peers.
A Debt/Equity ratio of 2.03 is on the high side and indicates that TEF has dependencies on debt financing.
The Debt to Equity ratio of TEF (2.03) is worse than 69.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 9.58 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.63
WACC4.05%
2.3 Liquidity
TEF has a Current Ratio of 0.87. 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 has a worse Current ratio (0.87) than 69.70% of its industry peers.
A Quick Ratio of 0.83 indicates that TEF may have some problems paying its short term obligations.
The Quick ratio of TEF (0.83) is worse than 69.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.83 |
3. Growth
3.1 Past
TEF shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.97%.
TEF shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.75% yearly.
The Revenue has been growing slightly by 1.63% in the past year.
The Revenue has been decreasing by -3.12% on average over the past years.
EPS 1Y (TTM)-4.97%
EPS 3YN/A
EPS 5Y-8.75%
EPS Q2Q%-35.35%
Revenue 1Y (TTM)1.63%
Revenue growth 3Y1.7%
Revenue growth 5Y-3.12%
Sales Q2Q%-14.97%
3.2 Future
Based on estimates for the next years, TEF will show a decrease in Earnings Per Share. The EPS will decrease by -1.92% on average per year.
TEF is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.24% yearly.
EPS Next Y-23.76%
EPS Next 2Y-11.43%
EPS Next 3Y-4.55%
EPS Next 5Y-1.92%
Revenue Next Year-3.13%
Revenue Next 2Y-1.49%
Revenue Next 3Y-0.94%
Revenue Next 5Y-0.24%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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 12.05, TEF is valued correctly.
Based on the Price/Earnings ratio, TEF is valued a bit cheaper than the industry average as 78.79% of the companies are valued more expensively.
TEF is valuated cheaply when we compare the Price/Earnings ratio to 25.05, which is the current average of the S&P500 Index.
TEF is valuated correctly with a Price/Forward Earnings ratio of 13.71.
Based on the Price/Forward Earnings ratio, TEF is valued a bit cheaper than 69.70% of the companies in the same industry.
TEF's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.07.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.05 | ||
| Fwd PE | 13.71 |
4.2 Price Multiples
78.79% of the companies in the same industry are more expensive than TEF, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.93 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
TEF's earnings are expected to decrease with -4.55% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-11.43%
EPS Next 3Y-4.55%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.63%, TEF is a good candidate for dividend investing.
TEF's Dividend Yield is a higher than the industry average which is at 4.65.
TEF's Dividend Yield is rather good when compared to the S&P500 average which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.63% |
5.2 History
The dividend of TEF decreases each year by -5.71%.
TEF has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of TEF decreased recently.
Dividend Growth(5Y)-5.71%
Div Incr Years1
Div Non Decr Years1
5.3 Sustainability
TEF has negative earnings and hence a negative payout ratio. The dividend may be in danger.
The Dividend Rate of TEF has been decling, while earnings will also be declining. This means the current dividend is most likely not sustainable.
DP-593.4%
EPS Next 2Y-11.43%
EPS Next 3Y-4.55%
4.82
+0.05 (+1.05%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners28.66%
Inst Owner Change0.45%
Ins Owners0.4%
Ins Owner ChangeN/A
Market Cap27.20B
Analysts54.84
Price Target4.78 (-0.83%)
Short Float %0.13%
Short Ratio6.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.63% |
Yearly Dividend0.37
Dividend Growth(5Y)-5.71%
DP-593.4%
Div Incr Years1
Div Non Decr Years1
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-16.24%
Min EPS beat(2)-51.51%
Max EPS beat(2)19.03%
EPS beat(4)3
Avg EPS beat(4)6.28%
Min EPS beat(4)-51.51%
Max EPS beat(4)36.57%
EPS beat(8)6
Avg EPS beat(8)3.94%
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)1
Avg Revenue beat(2)-0.43%
Min Revenue beat(2)-1.43%
Max Revenue beat(2)0.57%
Revenue beat(4)3
Avg Revenue beat(4)2.6%
Min Revenue beat(4)-1.43%
Max Revenue beat(4)10.07%
Revenue beat(8)4
Avg Revenue beat(8)1.31%
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)4.24%
PT rev (3m)7.48%
EPS NQ rev (1m)0%
EPS NQ rev (3m)N/A
EPS NY rev (1m)0.21%
EPS NY rev (3m)-2.26%
Revenue NQ rev (1m)-3.46%
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-2.74%
Revenue NY rev (3m)-2.83%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.05 | ||
| Fwd PE | 13.71 | ||
| P/S | 0.59 | ||
| P/FCF | 4.93 | ||
| P/OCF | 2.32 | ||
| P/B | 1.25 | ||
| P/tB | N/A | ||
| EV/EBITDA | N/A |
EPS(TTM)0.4
EY8.3%
EPS(NY)0.35
Fwd EY7.29%
FCF(TTM)0.98
FCFY20.27%
OCF(TTM)2.07
OCFY43.03%
SpS8.21
BVpS3.84
TBVpS-1.39
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -0.32% | ||
| ROE | -1.64% | ||
| ROCE | 3.22% | ||
| ROIC | 2.54% | ||
| ROICexc | 2.87% | ||
| ROICexgc | 4.76% | ||
| OM | 5.82% | ||
| PM (TTM) | N/A | ||
| GM | 49.39% | ||
| FCFM | 11.9% |
ROA(3y)0.08%
ROA(5y)1.74%
ROE(3y)0.1%
ROE(5y)9.53%
ROIC(3y)3.43%
ROIC(5y)3.52%
ROICexc(3y)3.84%
ROICexc(5y)3.95%
ROICexgc(3y)6.39%
ROICexgc(5y)6.59%
ROCE(3y)4.35%
ROCE(5y)4.46%
ROICexcg growth 3Y26.02%
ROICexcg growth 5Y3.81%
ROICexc growth 3Y25.08%
ROICexc growth 5Y8.63%
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%
F-Score6
Asset Turnover0.41
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.03 | ||
| Debt/FCF | 9.58 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | N/A | ||
| Cap/Sales | 13.36% | ||
| Interest Coverage | -2.27 | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.87 | ||
| Quick Ratio | 0.83 | ||
| Altman-Z | 0.96 |
F-Score6
WACC4.05%
ROIC/WACC0.63
Cap/Depr(3y)N/A
Cap/Depr(5y)N/A
Cap/Sales(3y)13.84%
Cap/Sales(5y)14.7%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-4.97%
EPS 3YN/A
EPS 5Y-8.75%
EPS Q2Q%-35.35%
EPS Next Y-23.76%
EPS Next 2Y-11.43%
EPS Next 3Y-4.55%
EPS Next 5Y-1.92%
Revenue 1Y (TTM)1.63%
Revenue growth 3Y1.7%
Revenue growth 5Y-3.12%
Sales Q2Q%-14.97%
Revenue Next Year-3.13%
Revenue Next 2Y-1.49%
Revenue Next 3Y-0.94%
Revenue Next 5Y-0.24%
EBIT growth 1Y-42.5%
EBIT growth 3Y20.77%
EBIT growth 5Y4.69%
EBIT Next Year186.65%
EBIT Next 3Y42.49%
EBIT Next 5Y23.68%
FCF growth 1Y8.31%
FCF growth 3Y6.37%
FCF growth 5Y-7.72%
OCF growth 1Y0.45%
OCF growth 3Y0.61%
OCF growth 5Y-7%