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 35 industry peers in the Diversified Telecommunication Services industry. TU has a medium profitability rating, but doesn't score so well on its financial health evaluation. TU is not valued too expensively and it also shows a decent growth rate. TU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year TU was profitable.
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
Looking at the Return On Assets, with a value of 2.05%, TU is in the better half of the industry, outperforming 62.86% of the companies in the same industry.
With a decent Return On Equity value of 7.61%, TU is doing good in the industry, outperforming 62.86% of the companies in the same industry.
TU has a Return On Invested Capital of 5.14%. This is in the better half of the industry: TU outperforms 68.57% 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 7.14%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 7.61% | ||
| ROIC | 5.14% |
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
Looking at the Profit Margin, with a value of 5.85%, TU is in the better half of the industry, outperforming 62.86% of the companies in the same industry.
In the last couple of years the Profit Margin of TU has declined.
TU's Operating Margin of 15.87% is fine compared to the rest of the industry. TU outperforms 74.29% of its industry peers.
In the last couple of years the Operating Margin of TU has declined.
The Gross Margin of TU (62.84%) is better than 68.57% of its industry peers.
In the last couple of years the Gross Margin of TU has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.87% | ||
| PM (TTM) | 5.85% | ||
| GM | 62.84% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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 0.95. This is a bad value and indicates that TU is not financially healthy and even has some risk of bankruptcy.
TU has a better Altman-Z score (0.95) than 65.71% of its industry peers.
The Debt to FCF ratio of TU is 35.65, which is on the high side as it means it would take TU, 35.65 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 35.65, TU is doing worse than 65.71% of the companies in the same industry.
A Debt/Equity ratio of 1.68 is on the high side and indicates that TU has dependencies on debt financing.
TU's Debt to Equity ratio of 1.68 is on the low side compared to the rest of the industry. TU is outperformed by 62.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 35.65 | ||
| Altman-Z | 0.95 |
ROIC/WACC0.92
WACC5.59%
2.3 Liquidity
A Current Ratio of 0.64 indicates that TU may have some problems paying its short term obligations.
TU has a Current ratio of 0.64. This is amonst the worse of the industry: TU underperforms 82.86% of its industry peers.
A Quick Ratio of 0.59 indicates that TU may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.59, TU is doing worse than 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.64 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
TU shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.20%.
TU shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -6.24% yearly.
The Revenue has been growing slightly by 0.67% in the past year.
The Revenue has been growing slightly by 6.66% on average over the past years.
EPS 1Y (TTM)1.2%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%-11.21%
Revenue 1Y (TTM)0.67%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%2.44%
3.2 Future
The Earnings Per Share is expected to grow by 16.91% on average over the next years. This is quite good.
Based on estimates for the next years, TU will show a small growth in Revenue. The Revenue will grow by 2.56% on average per year.
EPS Next Y-0.55%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
EPS Next 5Y16.91%
Revenue Next Year3.23%
Revenue Next 2Y2.9%
Revenue Next 3Y2.91%
Revenue Next 5Y2.56%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
TU is valuated rather expensively with a Price/Earnings ratio of 21.37.
68.57% of the companies in the same industry are more expensive than TU, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 26.82. TU is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 19.04, the valuation of TU can be described as rather expensive.
TU's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TU is cheaper than 65.71% of the companies in the same industry.
TU is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 36.21, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.37 | ||
| Fwd PE | 19.04 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TU indicates a somewhat cheap valuation: TU is cheaper than 65.71% of the companies listed in the same industry.
TU's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.14 | ||
| EV/EBITDA | 8.45 |
4.3 Compensation for Growth
TU has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y4.56%
EPS Next 3Y8.06%
5. Dividend
5.1 Amount
TU has a Yearly Dividend Yield of 7.46%, which is a nice return.
TU's Dividend Yield is rather good when compared to the industry average which is at 5.12. TU pays more dividend than 94.29% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.39, TU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.46% |
5.2 History
The dividend of TU has a limited annual growth rate of 1.90%.
TU has paid a dividend for at least 10 years, which is 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
135.21% of the earnings are spent on dividend by TU. This is not a sustainable payout ratio.
The dividend of TU is growing, but earnings are growing more, so the dividend growth is sustainable.
DP135.21%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
15.6
-0.5 (-3.11%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners54.56%
Inst Owner Change0.48%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap23.78B
Analysts70.83
Price Target17.01 (9.04%)
Short Float %2.09%
Short Ratio11.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.46% |
Yearly Dividend0.76
Dividend Growth(5Y)1.9%
DP135.21%
Div Incr Years21
Div Non Decr Years21
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)13.26%
Min EPS beat(2)11.18%
Max EPS beat(2)15.34%
EPS beat(4)4
Avg EPS beat(4)14%
Min EPS beat(4)11.18%
Max EPS beat(4)16.54%
EPS beat(8)7
Avg EPS beat(8)6.46%
EPS beat(12)10
Avg EPS beat(12)3.65%
EPS beat(16)11
Avg EPS beat(16)1.77%
Revenue beat(2)1
Avg Revenue beat(2)-0.3%
Min Revenue beat(2)-1.38%
Max Revenue beat(2)0.77%
Revenue beat(4)1
Avg Revenue beat(4)-1.03%
Min Revenue beat(4)-2.62%
Max Revenue beat(4)0.77%
Revenue beat(8)1
Avg Revenue beat(8)-2.03%
Revenue beat(12)1
Avg Revenue beat(12)-2.04%
Revenue beat(16)2
Avg Revenue beat(16)-1.99%
PT rev (1m)1.05%
PT rev (3m)3.74%
EPS NQ rev (1m)-1.87%
EPS NQ rev (3m)0.69%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-0.16%
Revenue NQ rev (3m)-1.04%
Revenue NY rev (1m)0.13%
Revenue NY rev (3m)0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.37 | ||
| Fwd PE | 19.04 | ||
| P/S | 1.63 | ||
| P/FCF | 39.14 | ||
| P/OCF | 6.63 | ||
| P/B | 2.11 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.45 |
EPS(TTM)0.73
EY4.68%
EPS(NY)0.82
Fwd EY5.25%
FCF(TTM)0.4
FCFY2.55%
OCF(TTM)2.35
OCFY15.07%
SpS9.59
BVpS7.38
TBVpS-7.31
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.05% | ||
| ROE | 7.61% | ||
| ROCE | 6.78% | ||
| ROIC | 5.14% | ||
| ROICexc | 5.25% | ||
| ROICexgc | 15% | ||
| OM | 15.87% | ||
| PM (TTM) | 5.85% | ||
| GM | 62.84% | ||
| FCFM | 4.15% |
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 | 1.68 | ||
| Debt/FCF | 35.65 | ||
| Debt/EBITDA | 3.66 | ||
| Cap/Depr | 104.19% | ||
| Cap/Sales | 20.36% | ||
| Interest Coverage | 2.36 | ||
| Cash Conversion | 69.23% | ||
| Profit Quality | 71.02% | ||
| Current Ratio | 0.64 | ||
| Quick Ratio | 0.59 | ||
| Altman-Z | 0.95 |
F-Score5
WACC5.59%
ROIC/WACC0.92
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)1.2%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%-11.21%
EPS Next Y-0.55%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
EPS Next 5Y16.91%
Revenue 1Y (TTM)0.67%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%2.44%
Revenue Next Year3.23%
Revenue Next 2Y2.9%
Revenue Next 3Y2.91%
Revenue Next 5Y2.56%
EBIT growth 1Y4.72%
EBIT growth 3Y-0.51%
EBIT growth 5Y0.7%
EBIT Next Year151.16%
EBIT Next 3Y39.7%
EBIT Next 5Y23.98%
FCF growth 1Y207.66%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y12.1%
OCF growth 3Y3.37%
OCF growth 5Y4.3%