TELENOR ASA (TEL.OL) Stock Fundamental Analysis
Europe - Euronext Oslo - OSL:TEL - NO0010063308 - Common Stock
156.5 NOK
-0.5 (-0.32%)
Taking everything into account, TEL scores 5 out of 10 in our fundamental rating. TEL was compared to 35 industry peers in the Diversified Telecommunication Services industry. While TEL belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. TEL is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- TEL had positive earnings in the past year.
- In the past year TEL had a positive cash flow from operations.
- Each year in the past 5 years TEL has been profitable.
- In the past 5 years TEL always reported a positive cash flow from operatings.
1.2 Ratios
- TEL has a Return On Assets of 4.47%. This is in the better half of the industry: TEL outperforms 65.71% of its industry peers.
- The Return On Equity of TEL (14.79%) is comparable to the rest of the industry.
- The Return On Invested Capital of TEL (8.58%) is better than 77.14% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for TEL is in line with the industry average of 8.42%.
- The last Return On Invested Capital (8.58%) for TEL is above the 3 year average (7.81%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.47% | ||
| ROE | 14.79% | ||
| ROIC | 8.58% |
ROA(3y)11.03%
ROA(5y)8.1%
ROE(3y)40.05%
ROE(5y)34.24%
ROIC(3y)7.81%
ROIC(5y)8.57%
1.3 Margins
- TEL's Profit Margin of 12.26% is fine compared to the rest of the industry. TEL outperforms 71.43% of its industry peers.
- In the last couple of years the Profit Margin of TEL has grown nicely.
- TEL has a better Operating Margin (23.18%) than 82.86% of its industry peers.
- TEL's Operating Margin has been stable in the last couple of years.
- The Gross Margin of TEL (78.29%) is better than 77.14% of its industry peers.
- In the last couple of years the Gross Margin of TEL has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 23.18% | ||
| PM (TTM) | 12.26% | ||
| GM | 78.29% |
OM growth 3Y4.24%
OM growth 5Y-0.38%
PM growth 3Y144.33%
PM growth 5Y27.39%
GM growth 3Y1.85%
GM growth 5Y0.62%
2. Health
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so TEL is still creating some value.
- TEL has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, TEL has less shares outstanding
- Compared to 1 year ago, TEL has an improved debt to assets ratio.
2.2 Solvency
- TEL has an Altman-Z score of 1.73. This is a bad value and indicates that TEL is not financially healthy and even has some risk of bankruptcy.
- TEL has a better Altman-Z score (1.73) than 82.86% of its industry peers.
- The Debt to FCF ratio of TEL is 5.37, which is a neutral value as it means it would take TEL, 5.37 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of TEL (5.37) is better than 82.86% of its industry peers.
- TEL has a Debt/Equity ratio of 1.23. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 1.23, TEL is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.23 | ||
| Debt/FCF | 5.37 | ||
| Altman-Z | 1.73 |
ROIC/WACC1.22
WACC7.03%
2.3 Liquidity
- TEL has a Current Ratio of 0.52. This is a bad value and indicates that TEL is not financially healthy enough and could expect problems in meeting its short term obligations.
- TEL's Current ratio of 0.52 is on the low side compared to the rest of the industry. TEL is outperformed by 85.71% of its industry peers.
- TEL has a Quick Ratio of 0.52. This is a bad value and indicates that TEL is not financially healthy enough and could expect problems in meeting its short term obligations.
- The Quick ratio of TEL (0.51) is worse than 85.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.52 | ||
| Quick Ratio | 0.51 |
3. Growth
3.1 Past
- The earnings per share for TEL have decreased strongly by -40.98% in the last year.
- The Earnings Per Share has been growing slightly by 7.44% on average over the past years.
- TEL shows a small growth in Revenue. In the last year, the Revenue has grown by 0.57%.
- Measured over the past years, TEL shows a decrease in Revenue. The Revenue has been decreasing by -6.80% on average per year.
EPS 1Y (TTM)-40.98%
EPS 3Y23.32%
EPS 5Y7.44%
EPS Q2Q%-25.1%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y-6.3%
Revenue growth 5Y-6.8%
Sales Q2Q%1.33%
3.2 Future
- The Earnings Per Share is expected to decrease by -3.77% on average over the next years.
- The Revenue is expected to grow by 0.58% on average over the next years.
EPS Next Y-36.77%
EPS Next 2Y-13.34%
EPS Next 3Y-5.78%
EPS Next 5Y-3.77%
Revenue Next Year0.35%
Revenue Next 2Y0.42%
Revenue Next 3Y0.83%
Revenue Next 5Y0.58%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less 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
- The Price/Earnings ratio is 20.70, which indicates a rather expensive current valuation of TEL.
- TEL's Price/Earnings is on the same level as the industry average.
- When comparing the Price/Earnings ratio of TEL to the average of the S&P500 Index (27.25), we can say TEL is valued slightly cheaper.
- With a Price/Forward Earnings ratio of 15.54, TEL is valued correctly.
- The rest of the industry has a similar Price/Forward Earnings ratio as TEL.
- When comparing the Price/Forward Earnings ratio of TEL to the average of the S&P500 Index (25.98), we can say TEL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.7 | ||
| Fwd PE | 15.54 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TEL indicates a slightly more expensive valuation: TEL is more expensive than 68.57% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, TEL is valued a bit cheaper than 62.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 11.56 | ||
| EV/EBITDA | 8.37 |
4.3 Compensation for Growth
- TEL has a very decent profitability rating, which may justify a higher PE ratio.
- TEL's earnings are expected to decrease with -5.78% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)2.78
EPS Next 2Y-13.34%
EPS Next 3Y-5.78%
5. Dividend
5.1 Amount
- TEL has a Yearly Dividend Yield of 6.13%, which is a nice return.
- Compared to an average industry Dividend Yield of 3.26, TEL pays a better dividend. On top of this TEL pays more dividend than 82.86% of the companies listed in the same industry.
- TEL's Dividend Yield is rather good when compared to the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.13% |
5.2 History
- The dividend of TEL has a limited annual growth rate of 2.70%.
Dividend Growth(5Y)2.7%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
- 131.16% of the earnings are spent on dividend by TEL. This is not a sustainable payout ratio.
- TEL's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP131.16%
EPS Next 2Y-13.34%
EPS Next 3Y-5.78%
TELENOR ASA / TEL.OL FAQ
Can you provide the ChartMill fundamental rating for TELENOR ASA?
ChartMill assigns a fundamental rating of 5 / 10 to TEL.OL.
What is the valuation status for TEL stock?
ChartMill assigns a valuation rating of 4 / 10 to TELENOR ASA (TEL.OL). This can be considered as Fairly Valued.
Can you provide the profitability details for TELENOR ASA?
TELENOR ASA (TEL.OL) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for TEL stock?
The Price/Earnings (PE) ratio for TELENOR ASA (TEL.OL) is 20.7 and the Price/Book (PB) ratio is 3.2.
How sustainable is the dividend of TELENOR ASA (TEL.OL) stock?
The dividend rating of TELENOR ASA (TEL.OL) is 6 / 10 and the dividend payout ratio is 131.16%.