TELUS CORP (TU) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TU - CA87971M1032 - Common Stock
13.11 USD
-0.06 (-0.46%)
13.12 USD
+0.01 (+0.08%)
TU gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 37 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 valued correctly, but it does not seem to be growing. Finally 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.
In the past 5 years TU has always been profitable.
Each year in the past 5 years TU had a positive operating cash flow.
1.2 Ratios
The Return On Assets of TU (2.00%) is better than 62.16% of its industry peers.
Looking at the Return On Equity, with a value of 7.43%, TU is in the better half of the industry, outperforming 67.57% of the companies in the same industry.
TU has a Return On Invested Capital of 4.94%. This is comparable to the rest of the industry: TU outperforms 59.46% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TU is in line with the industry average of 6.52%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2% | ||
| ROE | 7.43% | ||
| ROIC | 4.94% |
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
TU's Profit Margin of 5.77% is fine compared to the rest of the industry. TU outperforms 64.86% of its industry peers.
In the last couple of years the Profit Margin of TU has declined.
TU's Operating Margin of 15.48% is in line compared to the rest of the industry. TU outperforms 59.46% of its industry peers.
In the last couple of years the Operating Margin of TU has declined.
With a decent Gross Margin value of 62.85%, TU is doing good in the industry, outperforming 64.86% of the companies in the same industry.
TU's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.48% | ||
| PM (TTM) | 5.77% | ||
| GM | 62.85% |
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
TU has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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.
TU has a worse debt/assets ratio than last year.
2.2 Solvency
TU has an Altman-Z score of 0.88. 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 0.88, TU is in line with its industry, outperforming 56.76% of the companies in the same industry.
The Debt to FCF ratio of TU is 30.52, which is on the high side as it means it would take TU, 30.52 years of fcf income to pay off all of its debts.
TU has a Debt to FCF ratio (30.52) which is comparable to the rest of the 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 67.57% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 30.52 | ||
| Altman-Z | 0.88 |
ROIC/WACC0.92
WACC5.37%
2.3 Liquidity
TU has a Current Ratio of 0.76. This is a bad value and indicates that TU is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of TU (0.76) is worse than 81.08% of its industry peers.
TU has a Quick Ratio of 0.76. 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 Quick ratio of 0.71. This is amonst the worse of the industry: TU underperforms 81.08% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
The earnings per share for TU have decreased by -5.83% in the last year.
The Earnings Per Share has been decreasing by -6.24% on average over the past years.
Looking at the last year, TU shows a small growth in Revenue. The Revenue has grown by 2.42% in the last 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)-5.83%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%-14.29%
Revenue 1Y (TTM)2.42%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%0.14%
3.2 Future
The Earnings Per Share is expected to grow by 6.50% on average over the next years.
TU is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.62% yearly.
EPS Next Y-4.08%
EPS Next 2Y2.35%
EPS Next 3Y3.96%
EPS Next 5Y6.5%
Revenue Next Year0.39%
Revenue Next 2Y1.39%
Revenue Next 3Y2.56%
Revenue Next 5Y3.62%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 18.46, the valuation of TU can be described as rather expensive.
67.57% of the companies in the same industry are more expensive than TU, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of TU to the average of the S&P500 Index (26.60), we can say TU is valued slightly cheaper.
A Price/Forward Earnings ratio of 16.48 indicates a correct valuation of TU.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TU indicates a somewhat cheap valuation: TU is cheaper than 67.57% of the companies listed in the same industry.
TU is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.23, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.46 | ||
| Fwd PE | 16.48 |
4.2 Price Multiples
TU's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TU is cheaper than 64.86% of the companies in the same industry.
The rest of the industry has a similar Price/Free Cash Flow ratio as TU.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.41 | ||
| EV/EBITDA | 7.66 |
4.3 Compensation for Growth
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y2.35%
EPS Next 3Y3.96%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 9.21%, TU is a good candidate for dividend investing.
TU's Dividend Yield is rather good when compared to the industry average which is at 2.38. TU pays more dividend than 94.59% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, TU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.21% |
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
TU pays out 135.96% of its income as dividend. This is not a sustainable payout ratio.
TU's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP135.96%
EPS Next 2Y2.35%
EPS Next 3Y3.96%
13.11
-0.06 (-0.46%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners55.52%
Inst Owner Change0%
Ins Owners0.05%
Ins Owner ChangeN/A
Market Cap20.33B
Revenue(TTM)20.45B
Net Income(TTM)1.18B
Analysts70.43
Price Target16.1 (22.81%)
Short Float %4.61%
Short Ratio11.12
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.21% |
Yearly Dividend0.77
Dividend Growth(5Y)1.9%
DP135.96%
Div Incr Years21
Div Non Decr Years21
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-8.23%
Min EPS beat(2)-9.6%
Max EPS beat(2)-6.86%
EPS beat(4)2
Avg EPS beat(4)2.51%
Min EPS beat(4)-9.6%
Max EPS beat(4)15.34%
EPS beat(8)6
Avg EPS beat(8)6.26%
EPS beat(12)8
Avg EPS beat(12)1.44%
EPS beat(16)10
Avg EPS beat(16)0.79%
Revenue beat(2)0
Avg Revenue beat(2)-2.01%
Min Revenue beat(2)-3.02%
Max Revenue beat(2)-0.99%
Revenue beat(4)1
Avg Revenue beat(4)-1.16%
Min Revenue beat(4)-3.02%
Max Revenue beat(4)0.77%
Revenue beat(8)1
Avg Revenue beat(8)-1.96%
Revenue beat(12)1
Avg Revenue beat(12)-1.92%
Revenue beat(16)2
Avg Revenue beat(16)-1.99%
PT rev (1m)-3.84%
PT rev (3m)-5.1%
EPS NQ rev (1m)2.36%
EPS NQ rev (3m)-7.59%
EPS NY rev (1m)0.51%
EPS NY rev (3m)-4.08%
Revenue NQ rev (1m)-0.32%
Revenue NQ rev (3m)-1.04%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-2.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.46 | ||
| Fwd PE | 16.48 | ||
| P/S | 1.36 | ||
| P/FCF | 28.41 | ||
| P/OCF | 5.78 | ||
| P/B | 1.75 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.66 |
EPS(TTM)0.71
EY5.42%
EPS(NY)0.8
Fwd EY6.07%
FCF(TTM)0.46
FCFY3.52%
OCF(TTM)2.27
OCFY17.29%
SpS9.63
BVpS7.47
TBVpS-7.09
PEG (NY)N/A
PEG (5Y)N/A
Graham Number10.93
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2% | ||
| ROE | 7.43% | ||
| ROCE | 6.45% | ||
| ROIC | 4.94% | ||
| ROICexc | 5.12% | ||
| ROICexgc | 14.3% | ||
| OM | 15.48% | ||
| PM (TTM) | 5.77% | ||
| GM | 62.85% | ||
| FCFM | 4.79% |
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%
ROICexgc growth 3Y-6.18%
ROICexgc 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-Score6
Asset Turnover0.35
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 30.52 | ||
| Debt/EBITDA | 3.72 | ||
| Cap/Depr | 95.4% | ||
| Cap/Sales | 18.75% | ||
| Interest Coverage | 2.27 | ||
| Cash Conversion | 67% | ||
| Profit Quality | 83.12% | ||
| Current Ratio | 0.76 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 0.88 |
F-Score6
WACC5.37%
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)-5.83%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%-14.29%
EPS Next Y-4.08%
EPS Next 2Y2.35%
EPS Next 3Y3.96%
EPS Next 5Y6.5%
Revenue 1Y (TTM)2.42%
Revenue growth 3Y6.15%
Revenue growth 5Y6.66%
Sales Q2Q%0.14%
Revenue Next Year0.39%
Revenue Next 2Y1.39%
Revenue Next 3Y2.56%
Revenue Next 5Y3.62%
EBIT growth 1Y-2.34%
EBIT growth 3Y-0.51%
EBIT growth 5Y0.7%
EBIT Next Year147.79%
EBIT Next 3Y38.35%
EBIT Next 5Y23.4%
FCF growth 1Y123.24%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y11.64%
OCF growth 3Y3.37%
OCF growth 5Y4.3%
TELUS CORP / TU FAQ
What is the fundamental rating for TU stock?
ChartMill assigns a fundamental rating of 4 / 10 to TU.
What is the valuation status of TELUS CORP (TU) stock?
ChartMill assigns a valuation rating of 4 / 10 to TELUS CORP (TU). This can be considered as Fairly Valued.
How profitable is TELUS CORP (TU) stock?
TELUS CORP (TU) has a profitability rating of 5 / 10.
What is the valuation of TELUS CORP based on its PE and PB ratios?
The Price/Earnings (PE) ratio for TELUS CORP (TU) is 18.46 and the Price/Book (PB) ratio is 1.75.
What is the financial health of TELUS CORP (TU) stock?
The financial health rating of TELUS CORP (TU) is 1 / 10.