TELEFONICA SA-SPON ADR (TEF) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TEF - US8793822086 - ADR
3.81 USD
-0.04 (-1.04%)
3.8 USD
-0.01 (-0.26%)
We assign a fundamental rating of 4 out of 10 to TEF. TEF was compared to 36 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 is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- TEF had positive earnings in the past year.
- TEF had a positive operating cash flow in the past year.
- The reported net income has been mixed in the past 5 years: TEF reported negative net income in multiple years.
- In the past 5 years TEF always reported a positive cash flow from operatings.
1.2 Ratios
- TEF has a Return On Assets of -4.10%. This is in the lower half of the industry: TEF underperforms 63.16% of its industry peers.
- TEF's Return On Equity of -21.56% is on the low side compared to the rest of the industry. TEF is outperformed by 71.05% of its industry peers.
- TEF has a better Return On Invested Capital (7.73%) than 84.21% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for TEF is below the industry average of 6.71%.
- The last Return On Invested Capital (7.73%) for TEF is above the 3 year average (3.43%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -4.1% | ||
| ROE | -21.56% | ||
| ROIC | 7.73% |
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 (12.00%) is comparable to the rest of the industry.
- In the last couple of years the Operating Margin of TEF has grown nicely.
- The Gross Margin of TEF (35.73%) is worse than 78.95% of its industry peers.
- TEF's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12% | ||
| PM (TTM) | N/A | ||
| GM | 35.73% |
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 just above the Cost of Capital (WACC), which means it is creating some value.
- The number of shares outstanding for TEF remains at a similar level compared to 1 year ago.
- The number of shares outstanding for TEF has been reduced compared to 5 years ago.
- TEF has a worse debt/assets ratio than last year.
2.2 Solvency
- The Debt to FCF ratio of TEF is 8.80, which is on the high side as it means it would take TEF, 8.80 years of fcf income to pay off all of its debts.
- Looking at the Debt to FCF ratio, with a value of 8.80, TEF is in the better half of the industry, outperforming 68.42% of the companies in the same industry.
- A Debt/Equity ratio of 2.07 is on the high side and indicates that TEF has dependencies on debt financing.
- TEF has a worse Debt to Equity ratio (2.07) than 71.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 2.07 | ||
| Debt/FCF | 8.8 | ||
| Altman-Z | N/A |
ROIC/WACC1.79
WACC4.31%
2.3 Liquidity
- A Current Ratio of 0.84 indicates that TEF may have some problems paying its short term obligations.
- With a Current ratio value of 0.84, TEF is not doing good in the industry: 73.68% of the companies in the same industry are doing better.
- TEF has a Quick Ratio of 0.84. This is a bad value and indicates that TEF is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Quick ratio of TEF (0.80) is worse than 76.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.84 | ||
| Quick Ratio | 0.8 |
3. Growth
3.1 Past
- The earnings per share for TEF have decreased strongly by -34.78% in the last year.
- Measured over the past years, TEF shows a decrease in Earnings Per Share. The EPS has been decreasing by -8.73% on average per year.
- The Revenue has grown by 40.77% in the past year. This is a very strong growth!
- Measured over the past years, TEF shows a decrease in Revenue. The Revenue has been decreasing by -3.12% on average per year.
EPS 1Y (TTM)-34.78%
EPS 3YN/A
EPS 5Y-8.73%
EPS Q2Q%-18.18%
Revenue 1Y (TTM)40.77%
Revenue growth 3Y1.7%
Revenue growth 5Y-3.12%
Sales Q2Q%-10.63%
3.2 Future
- TEF is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.32% yearly.
- The Revenue is expected to decrease by -1.34% on average over the next years.
EPS Next Y-37.45%
EPS Next 2Y-9.99%
EPS Next 3Y-2.86%
EPS Next 5Y1.32%
Revenue Next Year-11.05%
Revenue Next 2Y-5.32%
Revenue Next 3Y-3.08%
Revenue Next 5Y-1.34%
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.
- 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
- The Price/Earnings ratio is 10.89, which indicates a very decent valuation of TEF.
- TEF's Price/Earnings ratio is rather cheap when compared to the industry. TEF is cheaper than 84.21% of the companies in the same industry.
- TEF's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.21.
- With a Price/Forward Earnings ratio of 10.01, the valuation of TEF can be described as very reasonable.
- Based on the Price/Forward Earnings ratio, TEF is valued cheaper than 86.84% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.98. TEF is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.89 | ||
| Fwd PE | 10.01 |
4.2 Price Multiples
- Based on the Price/Free Cash Flow ratio, TEF is valued cheaply inside the industry as 97.37% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 3.75 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
- TEF's earnings are expected to decrease with -2.86% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-9.99%
EPS Next 3Y-2.86%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 7.35%, TEF is a good candidate for dividend investing.
- In the last 3 months the price of TEF has falen by -26.73%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
- TEF's Dividend Yield is rather good when compared to the industry average which is at 2.29. TEF pays more dividend than 92.11% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.81, TEF pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.35% |
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.
Dividend Growth(5Y)-5.71%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- The earnings of TEF are negative and hence is the payout ratio. TEF will probably not be able to sustain this dividend level.
DP-48.26%
EPS Next 2Y-9.99%
EPS Next 3Y-2.86%
TELEFONICA SA-SPON ADR / TEF FAQ
What is the ChartMill fundamental rating of TELEFONICA SA-SPON ADR (TEF) stock?
ChartMill assigns a fundamental rating of 4 / 10 to TEF.
Can you provide the valuation status for TELEFONICA SA-SPON ADR?
ChartMill assigns a valuation rating of 6 / 10 to TELEFONICA SA-SPON ADR (TEF). This can be considered as Fairly Valued.
How profitable is TELEFONICA SA-SPON ADR (TEF) stock?
TELEFONICA SA-SPON ADR (TEF) has a profitability rating of 4 / 10.
What is the valuation of TELEFONICA SA-SPON ADR based on its PE and PB ratios?
The Price/Earnings (PE) ratio for TELEFONICA SA-SPON ADR (TEF) is 10.89 and the Price/Book (PB) ratio is 1.04.
What is the earnings growth outlook for TELEFONICA SA-SPON ADR?
The Earnings per Share (EPS) of TELEFONICA SA-SPON ADR (TEF) is expected to decline by -37.45% in the next year.