TELUS CORP (TU) Stock Fundamental Analysis
NYSE:TU - New York Stock Exchange, Inc. - CA87971M1032 - Common Stock - Currency: USD
Overall TU gets a fundamental rating of 4 out of 10. We evaluated TU against 33 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. Finally TU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year TU was profitable.
TU had a positive operating cash flow in the past year.
TU had positive earnings in each of the past 5 years.
In the past 5 years TU always reported a positive cash flow from operatings.
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 60.61% 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 60.61% of the companies in the same industry.
With a decent Return On Invested Capital value of 5.14%, TU is doing good in 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 7.03%.
| 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 60.61% of the companies in the same industry.
TU's Profit Margin has declined in the last couple of years.
With a decent Operating Margin value of 15.87%, TU is doing good in the industry, outperforming 72.73% of the companies in the same industry.
In the last couple of years the Operating Margin of TU has declined.
Looking at the Gross Margin, with a value of 62.84%, TU is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
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
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.
TU has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, TU has a worse debt to assets ratio.
2.2 Solvency
TU has an Altman-Z score of 0.97. This is a bad value and indicates that TU is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of TU (0.97) is better than 63.64% 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.
TU's Debt to FCF ratio of 35.65 is on the low side compared to the rest of the industry. TU is outperformed by 69.70% of its industry peers.
A Debt/Equity ratio of 1.68 is on the high side and indicates that TU has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.68, TU is doing worse than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 35.65 | ||
| Altman-Z | 0.97 |
ROIC/WACC0.88
WACC5.86%
2.3 Liquidity
TU has a Current Ratio of 0.64. This is a bad value and indicates that TU is not financially healthy enough and could expect problems in meeting its short term obligations.
TU has a Current ratio of 0.64. This is amonst the worse of the industry: TU underperforms 87.88% of its industry peers.
A Quick Ratio of 0.59 indicates that TU may have some problems paying its short term obligations.
TU's Quick ratio of 0.59 is on the low side compared to the rest of the industry. TU is outperformed by 87.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.64 | ||
| Quick Ratio | 0.59 |
3. Growth
3.1 Past
TU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.64%, which is quite good.
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 1.73% in the past year.
TU shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 6.66% yearly.
EPS 1Y (TTM)10.64%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%0%
Revenue 1Y (TTM)1.73%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%3.12%
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 16.92% yearly.
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 5Y16.92%
Revenue Next Year3.09%
Revenue Next 2Y2.9%
Revenue Next 3Y2.98%
Revenue Next 5Y2.56%
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.
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
The Price/Earnings ratio is 21.51, which indicates a rather expensive current valuation of TU.
Based on the Price/Earnings ratio, TU is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.52. TU is around the same levels.
A Price/Forward Earnings ratio of 19.70 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 63.64% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.25, TU is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.51 | ||
| Fwd PE | 19.7 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TU is valued a bit cheaper than the industry average as 60.61% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, TU is valued a bit more expensive than 60.61% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.23 | ||
| EV/EBITDA | 8.58 |
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 7.19%, which is a nice return.
Compared to an average industry Dividend Yield of 5.07, TU pays a better dividend. On top of this TU pays more dividend than 90.91% of the companies listed in the same industry.
TU's Dividend Yield is rather good when compared to the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.19% |
5.2 History
The dividend of TU has a limited annual growth rate of 1.90%.
TU has been paying a dividend for at least 10 years, so it has a reliable track record.
TU has not decreased their dividend for at least 10 years, which is a reliable track record.
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.
TU's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP135.21%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
16.35
-0.05 (-0.3%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners57.34%
Inst Owner Change-1.77%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap24.76B
Analysts70.83
Price Target16.68 (2.02%)
Short Float %2.13%
Short Ratio9.45
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.19% |
Yearly Dividend0.77
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)1.71%
PT rev (3m)2.62%
EPS NQ rev (1m)1.83%
EPS NQ rev (3m)-3.96%
EPS NY rev (1m)0%
EPS NY rev (3m)0.4%
Revenue NQ rev (1m)-0.87%
Revenue NQ rev (3m)-0.66%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.51 | ||
| Fwd PE | 19.7 | ||
| P/S | 1.67 | ||
| P/FCF | 40.23 | ||
| P/OCF | 6.82 | ||
| P/B | 2.17 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.58 |
EPS(TTM)0.76
EY4.65%
EPS(NY)0.83
Fwd EY5.08%
FCF(TTM)0.41
FCFY2.49%
OCF(TTM)2.4
OCFY14.67%
SpS9.78
BVpS7.53
TBVpS-7.45
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 | 0.97 |
F-Score5
WACC5.86%
ROIC/WACC0.88
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)10.64%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%0%
EPS Next Y-0.55%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
EPS Next 5Y16.92%
Revenue 1Y (TTM)1.73%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%3.12%
Revenue Next Year3.09%
Revenue Next 2Y2.9%
Revenue Next 3Y2.98%
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 5Y23.41%
FCF growth 1Y207.66%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y12.1%
OCF growth 3Y3.37%
OCF growth 5Y4.3%