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. There are concerns on the financial health of TU while its profitability can be described as average. 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
In the past year TU was profitable.
In the past year TU had a positive cash flow from operations.
Each year in the past 5 years TU has been profitable.
TU had a positive operating cash flow in each of the past 5 years.
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.
Looking at the Return On Equity, with a value of 7.61%, TU is in the better half of the industry, outperforming 60.61% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.14%, TU is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
TU had an Average Return On Invested Capital over the past 3 years of 5.16%. This is below the industry average of 7.58%.
| 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
The Profit Margin of TU (5.85%) is better than 60.61% of its industry peers.
TU's Profit Margin has declined in the last couple of years.
TU has a Operating Margin of 15.87%. This is in the better half of the industry: TU outperforms 72.73% of its industry peers.
TU's Operating Margin has declined in the last couple of years.
TU has a Gross Margin of 62.84%. This is in the better half of the industry: TU outperforms 69.70% 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TU is destroying value.
Compared to 1 year ago, TU has more shares outstanding
TU has more shares outstanding than it did 5 years ago.
The debt/assets ratio for TU is higher compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.95, we must say that TU is in the distress zone and has some risk of bankruptcy.
TU has a Altman-Z score of 0.95. This is in the better half of the industry: TU outperforms 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 has a worse Debt to FCF ratio (35.65) than 63.64% 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 63.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 35.65 | ||
| Altman-Z | 0.95 |
ROIC/WACC0.89
WACC5.78%
2.3 Liquidity
A Current Ratio of 0.64 indicates that TU may have some problems paying its short term obligations.
With a Current ratio value of 0.64, TU is not doing good in the industry: 84.85% of the companies in the same industry are doing better.
TU has a Quick 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.
With a Quick ratio value of 0.59, TU is not doing good in the industry: 84.85% of the companies in the same industry are doing better.
| 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 9.47%, which is quite good.
Measured over the past years, TU shows a decrease in Earnings Per Share. The EPS has been decreasing by -6.24% on average per year.
The Revenue has been growing slightly by 1.73% in the past year.
The Revenue has been growing slightly by 6.66% on average over the past years.
EPS 1Y (TTM)9.47%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%135.22%
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 15.96% yearly.
Based on estimates for the next years, TU will show a small growth in Revenue. The Revenue will grow by 2.31% on average per year.
EPS Next Y-0.55%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
EPS Next 5Y15.96%
Revenue Next Year3.09%
Revenue Next 2Y2.9%
Revenue Next 3Y2.98%
Revenue Next 5Y2.31%
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
A Price/Earnings ratio of 20.99 indicates a rather expensive valuation of TU.
Based on the Price/Earnings ratio, TU is valued a bit cheaper than the industry average as 75.76% of the companies are valued more expensively.
TU's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.85.
The Price/Forward Earnings ratio is 19.12, which indicates a rather expensive current valuation of TU.
Based on the Price/Forward Earnings ratio, TU is valued a bit cheaper than 60.61% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 20.89. TU is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.99 | ||
| Fwd PE | 19.12 |
4.2 Price Multiples
TU's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TU is cheaper than 66.67% of the companies in the same industry.
TU's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. TU is more expensive than 63.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 39.04 | ||
| EV/EBITDA | 8.47 |
4.3 Compensation for Growth
The decent profitability rating of TU 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
With a Yearly Dividend Yield of 7.36%, TU is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.63, TU pays a better dividend. On top of this TU pays more dividend than 93.94% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.40, TU pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.36% |
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 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%
15.53
-0.12 (-0.77%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners57.34%
Inst Owner Change-2.24%
Ins Owners0.03%
Ins Owner ChangeN/A
Market Cap23.51B
Analysts70.83
Price Target16.37 (5.41%)
Short Float %2.22%
Short Ratio8.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 7.36% |
Yearly Dividend0.75
Dividend Growth(5Y)1.9%
DP135.21%
Div Incr Years21
Div Non Decr Years21
Ex-Date
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
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)4.18%
PT rev (3m)0.74%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)-5.03%
EPS NY rev (1m)-0.2%
EPS NY rev (3m)0.96%
Revenue NQ rev (1m)-0.25%
Revenue NQ rev (3m)-0.06%
Revenue NY rev (1m)-0.3%
Revenue NY rev (3m)1.16%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.99 | ||
| Fwd PE | 19.12 | ||
| P/S | 1.62 | ||
| P/FCF | 39.04 | ||
| P/OCF | 6.62 | ||
| P/B | 2.11 | ||
| P/tB | N/A | ||
| EV/EBITDA | 8.47 |
EPS(TTM)0.74
EY4.76%
EPS(NY)0.81
Fwd EY5.23%
FCF(TTM)0.4
FCFY2.56%
OCF(TTM)2.35
OCFY15.11%
SpS9.57
BVpS7.36
TBVpS-7.29
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
WACC5.78%
ROIC/WACC0.89
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)9.47%
EPS 3Y-0.32%
EPS 5Y-6.24%
EPS Q2Q%135.22%
EPS Next Y-0.55%
EPS Next 2Y4.56%
EPS Next 3Y8.06%
EPS Next 5Y15.96%
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 5Y2.31%
EBIT growth 1Y4.72%
EBIT growth 3Y-0.51%
EBIT growth 5Y0.7%
EBIT Next Year150.12%
EBIT Next 3Y39.47%
EBIT Next 5Y23.57%
FCF growth 1Y207.66%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y12.1%
OCF growth 3Y3.37%
OCF growth 5Y4.3%