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 32 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. While showing a medium growth rate, TU is valued expensive at the moment. TU also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
TU had positive earnings in the past year.
TU had a positive operating cash flow in the past year.
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 (2.05%) is better than 62.50% of its industry peers.
The Return On Equity of TU (7.61%) is better than 62.50% of its industry peers.
TU has a better Return On Invested Capital (5.14%) than 65.63% 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 7.13%.
| 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
TU has a better Profit Margin (5.85%) than 62.50% of its industry peers.
TU's Profit Margin has declined in the last couple of years.
TU's Operating Margin of 15.87% is fine compared to the rest of the industry. TU outperforms 71.88% of its industry peers.
In the last couple of years the Operating Margin of TU has declined.
TU has a better Gross Margin (62.84%) than 65.63% of its industry peers.
TU's Gross Margin has been stable in the last couple of years.
| 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
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.
The number of shares outstanding for TU has been increased compared to 5 years ago.
The debt/assets ratio for TU is higher compared to a year ago.
2.2 Solvency
TU has an Altman-Z score of 0.96. 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 (0.96) than 62.50% of its industry peers.
TU has a debt to FCF ratio of 35.65. This is a negative value and a sign of low solvency as TU would need 35.65 years to pay back of all of its debts.
The Debt to FCF ratio of TU (35.65) is worse than 68.75% of its industry peers.
TU has a Debt/Equity ratio of 1.68. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.68, TU is doing worse than 65.63% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 35.65 | ||
| Altman-Z | 0.96 |
ROIC/WACC0.66
WACC7.8%
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 87.50% of its industry peers.
A Quick Ratio of 0.59 indicates that TU may have some problems paying its short term obligations.
The Quick ratio of TU (0.59) is worse than 87.50% 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.
TU shows a small growth in Revenue. In the last year, the Revenue has grown by 1.73%.
The Revenue has been growing slightly by 6.66% on average over the past years.
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
Based on estimates for the next years, TU will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.91% on average per year.
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 Year3.09%
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 21.36, 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 68.75% of the companies are valued more expensively.
TU is valuated rather cheaply when we compare the Price/Earnings ratio to 27.28, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 19.48, which indicates a rather expensive current valuation of TU.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TU is on the same level as its industry peers.
TU is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.76, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.36 | ||
| Fwd PE | 19.48 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TU is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as TU.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.78 | ||
| EV/EBITDA | 8.52 |
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 7.66%, which is a nice return.
Compared to an average industry Dividend Yield of 5.16, TU pays a better dividend. On top of this TU pays more dividend than 90.63% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.42, TU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.66% |
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 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
TU pays out 135.21% 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.
DP135.21%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
16.23
-0.05 (-0.31%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners54.56%
Inst Owner Change-1.77%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap24.57B
Analysts70.83
Price Target16.84 (3.76%)
Short Float %2.26%
Short Ratio12.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.66% |
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)2.82%
PT rev (3m)5.1%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0.09%
EPS NY rev (1m)0%
EPS NY rev (3m)0.4%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.06%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.36 | ||
| Fwd PE | 19.48 | ||
| P/S | 1.65 | ||
| P/FCF | 39.78 | ||
| P/OCF | 6.74 | ||
| P/B | 2.15 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.52 |
EPS(TTM)0.76
EY4.68%
EPS(NY)0.83
Fwd EY5.13%
FCF(TTM)0.41
FCFY2.51%
OCF(TTM)2.41
OCFY14.83%
SpS9.82
BVpS7.55
TBVpS-7.48
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 | 0.96 |
F-Score5
WACC7.8%
ROIC/WACC0.66
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 5Y16.91%
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 5Y23.98%
FCF growth 1Y207.66%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y12.1%
OCF growth 3Y3.37%
OCF growth 5Y4.3%