TELUS CORP (TU)
CA87971M1032 - Common Stock
TU gets a fundamental rating of 3 out of 10. The analysis compared the fundamentals against 36 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 valied quite expensively at the moment, while it does show a decent growth rate.
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.
TU had positive earnings in each of the past 5 years.
Each year in the past 5 years TU had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 1.50%, TU is doing good in the industry, outperforming 61.11% of the companies in the same industry.
TU's Return On Equity of 5.22% is fine compared to the rest of the industry. TU outperforms 61.11% of its industry peers.
Looking at the Return On Invested Capital, with a value of 4.90%, TU is in the better half of the industry, outperforming 66.67% 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 5.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.5% | ||
| ROE | 5.22% | ||
| ROIC | 4.9% |
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
The Profit Margin of TU (4.20%) is better than 66.67% of its industry peers.
In the last couple of years the Profit Margin of TU has declined.
TU has a better Operating Margin (14.93%) than 75.00% of its industry peers.
TU's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 63.27%, TU is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Gross Margin of TU has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.93% | ||
| PM (TTM) | 4.2% | ||
| GM | 63.27% |
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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TU is destroying value.
The number of shares outstanding for TU has been increased compared to 1 year ago.
The number of shares outstanding for TU has been increased compared to 5 years ago.
TU has a worse debt/assets ratio than last year.
2.2 Solvency
TU has an Altman-Z score of 1.02. This is a bad value and indicates that TU is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 1.02, TU is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
The Debt to FCF ratio of TU is 31.66, which is on the high side as it means it would take TU, 31.66 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 31.66, TU is not doing good in the industry: 63.89% of the companies in the same industry are doing better.
TU has a Debt/Equity ratio of 1.46. This is a high value indicating a heavy dependency on external financing.
TU's Debt to Equity ratio of 1.46 is on the low side compared to the rest of the industry. TU is outperformed by 63.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.46 | ||
| Debt/FCF | 31.66 | ||
| Altman-Z | 1.02 |
ROIC/WACC0.81
WACC6.02%
2.3 Liquidity
A Current Ratio of 0.67 indicates that TU may have some problems paying its short term obligations.
TU's Current ratio of 0.67 is on the low side compared to the rest of the industry. TU is outperformed by 88.89% of its industry peers.
TU has a Quick Ratio of 0.67. This is a bad value and indicates that TU is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.62, TU is doing worse than 88.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
The earnings per share for TU have decreased strongly by -20.17% in the last year.
Measured over the past years, TU shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.85% on average per year.
Looking at the last year, TU shows a quite strong growth in Revenue. The Revenue has grown by 9.36% in the last year.
The Revenue has been growing slightly by 7.25% on average over the past years.
EPS 1Y (TTM)-20.17%
EPS 3Y-3.89%
EPS 5Y-7.85%
EPS growth Q2Q4.35%
Revenue 1Y (TTM)9.36%
Revenue growth 3Y9.25%
Revenue growth 5Y7.25%
Revenue growth Q2Q2.65%
3.2 Future
TU is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.09% yearly.
Based on estimates for the next years, TU will show a small growth in Revenue. The Revenue will grow by 4.91% on average per year.
EPS Next Y10.78%
EPS Next 2Y13.49%
EPS Next 3Y13.82%
EPS Next 5Y17.09%
Revenue Next Year2.64%
Revenue Next 2Y3.35%
Revenue Next 3Y4.04%
Revenue Next 5Y4.91%
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
Based on the Price/Earnings ratio of 23.29, the valuation of TU can be described as rather expensive.
TU's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 24.92, TU is valued at the same level.
A Price/Forward Earnings ratio of 20.88 indicates a rather expensive valuation of TU.
Based on the Price/Forward Earnings ratio, TU is valued a bit cheaper than the industry average as 63.89% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of TU to the average of the S&P500 Index (21.49), we can say TU is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.29 | ||
| Fwd PE | 20.88 |
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 | 37.2 | ||
| EV/EBITDA | 8.33 |
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.
The decent profitability rating of TU may justify a higher PE ratio.
TU's earnings are expected to grow with 13.82% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.16
PEG (5Y)N/A
EPS Next 2Y13.49%
EPS Next 3Y13.82%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.84%, TU is a good candidate for dividend investing.
TU's Dividend Yield is rather good when compared to the industry average which is at 5.02. TU pays more dividend than 97.22% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, TU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.84% |
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 its dividend in the past 5 years, so it has a somewhat stable track record.
Dividend Growth(5Y)-1.08%
Div Incr Years8
Div Non Decr Years8
5.3 Sustainability
156.36% of the earnings are spent on dividend by TU. This is not a sustainable payout ratio.
DP156.36%
EPS Next 2Y13.49%
EPS Next 3Y13.82%
TELUS CORP
NYSE:TU (4/26/2024, 7:21:03 PM)
After market: 16.07 0 (0%)16.07
-0.03 (-0.19%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap23.59B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.84% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.29 | ||
| Fwd PE | 20.88 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.16
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.5% | ||
| ROE | 5.22% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 14.93% | ||
| PM (TTM) | 4.2% | ||
| GM | 63.27% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.46 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.67 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-20.17%
EPS 3Y-3.89%
EPS 5Y
EPS growth Q2Q
EPS Next Y10.78%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)9.36%
Revenue growth 3Y9.25%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y