TSX:T

Stock Analysis Report

Executive Summary

TELUS Corporation, together with its subsidiaries, provides a range of telecommunications products and services in Canada.

Rewards

Trading at 51% below its fair value

Earnings are forecast to grow 3.46% per year

Earnings grew by 8.7% over the past year

Pays a high and reliable dividend of 4.63%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Solid track record established dividend payer.


Similar Companies

Share Price & News

How has TELUS's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: T has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.1%

T

2.6%

CA Telecom

0.8%

CA Market


1 Year Return

12.7%

T

15.1%

CA Telecom

10.6%

CA Market

Return vs Industry: T underperformed the Canadian Telecom industry which returned 12.5% over the past year.

Return vs Market: T exceeded the Canadian Market which returned 9.6% over the past year.


Shareholder returns

TIndustryMarket
7 Day3.1%2.6%0.8%
30 Day2.9%0.3%2.1%
90 Day13.2%3.6%6.6%
1 Year18.0%12.7%20.8%15.1%14.1%10.6%
3 Year35.2%18.3%20.6%3.1%17.0%6.4%
5 Year50.5%21.1%48.4%15.0%38.5%18.2%

Price Volatility Vs. Market

How volatile is TELUS's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is TELUS undervalued compared to its fair value and its price relative to the market?

49.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: T (CA$50.28) is trading below our estimate of fair value (CA$102.52)

Significantly Below Fair Value: T is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: T is poor value based on its PE Ratio (17.4x) compared to the Telecom industry average (17x).

PE vs Market: T is poor value based on its PE Ratio (17.4x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: T is poor value based on its PEG Ratio (5x)


Price to Book Ratio

PB vs Industry: T is overvalued based on its PB Ratio (2.8x) compared to the XN Telecom industry average (1.7x).


Next Steps

Future Growth

How is TELUS forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

4.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: T's forecast earnings growth (3.5% per year) is above the savings rate (1.4%).

Earnings vs Market: T's earnings (3.5% per year) are forecast to grow slower than the Canadian market (10.3% per year).

High Growth Earnings: T's earnings are forecast to grow, but not significantly.

Revenue vs Market: T's revenue (4.4% per year) is forecast to grow slower than the Canadian market (5% per year).

High Growth Revenue: T's revenue (4.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: T's Return on Equity is forecast to be low in 3 years time (16.2%).


Next Steps

Past Performance

How has TELUS performed over the past 5 years?

4.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: T has high quality earnings.

Growing Profit Margin: T's current net profit margins (12%) are higher than last year (11.5%).


Past Earnings Growth Analysis

Earnings Trend: T's earnings have grown by 4.1% per year over the past 5 years.

Accelerating Growth: T's earnings growth over the past year (8.7%) exceeds its 5-year average (4.1% per year).

Earnings vs Industry: T earnings growth over the past year (8.7%) exceeded the Telecom industry -32.3%.


Return on Equity

High ROE: T's Return on Equity (16.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is TELUS's financial position?


Financial Position Analysis

Short Term Liabilities: T's short term assets (CA$4.1B) do not cover its short term liabilities (CA$5.1B).

Long Term Liabilities: T's short term assets (CA$4.1B) do not cover its long term liabilities (CA$20.7B).


Debt to Equity History and Analysis

Debt Level: T's debt to equity ratio (144.3%) is considered high.

Reducing Debt: T's debt to equity ratio has increased from 116% to 144.3% over the past 5 years.

Debt Coverage: T's debt is well covered by operating cash flow (25.8%).

Interest Coverage: T's interest payments on its debt are well covered by EBIT (4.5x coverage).


Balance Sheet

Inventory Level: T has a high level of physical assets or inventory.

Debt Coverage by Assets: T's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is TELUS's current dividend yield, its reliability and sustainability?

4.48%

Current Dividend Yield


Dividend Yield vs Market

company4.5%marketbottom25%1.9%markettop25%5.5%industryaverage4.8%forecastin3Years4.8%

Current dividend yield vs market & industry

Notable Dividend: T's dividend (4.63%) is higher than the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: T's dividend (4.63%) is low compared to the top 25% of dividend payers in the Canadian market (5.48%).


Stability and Growth of Payments

Stable Dividend: T's dividends per share have been stable in the past 10 years.

Growing Dividend: T's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (76.7%), T's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: T's dividends in 3 years are forecast to be covered by earnings (69.6% payout ratio).


Next Steps

Management

What is the CEO of TELUS's salary, the management and board of directors tenure and is there insider trading?

6.1yrs

Average board tenure


CEO

Darren Entwistle (55yo)

20yrs

Tenure

CA$12,563,216

Compensation

Mr. Darren Entwistle, B.A., M.B.A., LLD, has been the Chief Executive Officer and President of TELUS Corporation since August 2015. Mr. Entwistle serves as the Chief Executive Officer and President at Telu ...


CEO Compensation Analysis

Compensation vs Market: Darren's total compensation ($USD9.62M) is above average for companies of similar size in the Canadian market ($USD7.32M).

Compensation vs Earnings: Darren's compensation has been consistent with company performance over the past year.


Board Age and Tenure

6.1yrs

Average Tenure

63.5yo

Average Age

Experienced Board: T's board of directors are considered experienced (6.1 years average tenure).


Insider Trading

Insider Buying: T insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellCA$47,11213 Dec 19
Eros Spadotto
EntityIndividual
Role
Chief Technology Officer
Executive Vice President of Technology Strategy & Business Transformation
Shares942
Max PriceCA$50.01
SellCA$37,61013 Dec 19
François Gratton
EntityIndividual
Shares752
Max PriceCA$50.01
SellCA$206,90713 Dec 19
Stephen Lewis
EntityIndividual
Shares4,037
Max PriceCA$51.33
SellCA$22,00613 Dec 19
Zainul Mawji
EntityIndividual
Shares440
Max PriceCA$50.01
SellCA$29,00813 Dec 19
Andrea Wood
EntityIndividual
Role
Chief Legal Officer
Chief Legal & Governance Officer
Shares580
Max PriceCA$50.01
SellCA$34,15913 Dec 19
Sandy McIntosh
EntityIndividual
Role
Head of Human Resources
Executive VP of People & Culture and Chief Human Resources Officer
Shares683
Max PriceCA$50.01
BuyCA$707,36910 Dec 19
Doug French
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares14,133
Max PriceCA$50.30
BuyCA$1,163,94210 Dec 19
Tony Geheran
EntityIndividual
Shares24,844
Max PriceCA$50.30
BuyCA$412,15810 Dec 19
Jim Senko
EntityIndividual
Shares9,016
Max PriceCA$50.30
SellCA$40,01809 Aug 19
Doug French
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares850
Max PriceCA$47.08
BuyCA$77,67009 Aug 19
Doug French
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares1,650
Max PriceCA$47.07
SellCA$112,26317 May 19
Doug French
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares2,300
Max PriceCA$48.81
BuyCA$148,96217 May 19
Doug French
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares3,050
Max PriceCA$48.84
SellCA$63,64917 May 19
John Manley
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,300
Max PriceCA$48.96
BuyCA$26,00210 May 19
Doug French
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares551
Max PriceCA$47.19
BuyCA$24,63310 May 19
Sandy McIntosh
EntityIndividual
Role
Head of Human Resources
Executive VP of People & Culture and Chief Human Resources Officer
Shares522
Max PriceCA$47.19
BuyCA$79,75110 May 19
Josh Blair
EntityIndividual
Shares1,690
Max PriceCA$47.19

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Darren Entwistle (55yo)

    President

    • Tenure: 20yrs
    • Compensation: CA$12.56m
  • Paul Lepage

    Senior Vice President

    • François Côté (61yo)

      Executive Vice President

      • Compensation: CA$2.05m
    • Andrea Wood

      Chief Legal & Governance Officer

      • Eros Spadotto

        Executive Vice President of Technology Strategy & Business Transformation

        • Compensation: CA$3.23m
      • Michel Belec

        Senior Vice President of Legal Services

        • Navin Arora

          President of TELUS Business Solutions

          • Sandy McIntosh

            Executive VP of People & Culture and Chief Human Resources Officer

            • Doug French

              Executive VP & CFO

              • Tenure: 24yrs
              • Compensation: CA$3.36m
            • Ian McMillan

              Investor Relations


              Board Members

              • Dick Auchinleck (67yo)

                Chairman

                • Tenure: 4.4yrs
                • Compensation: CA$518.94k
              • Brian Canfield (80yo)

                Chairman Emeritus

                • Tenure: 5.7yrs
                • Compensation: CA$255.63k
              • Darren Entwistle (55yo)

                President

                • Tenure: 20yrs
                • Compensation: CA$12.56m
              • Lisa de Wilde (63yo)

                Independent Director

                • Tenure: 4.9yrs
                • Compensation: CA$238.65k
              • Dave Mowat (63yo)

                Independent Director

                • Tenure: 3.7yrs
                • Compensation: CA$265.00k
              • Ray Chan (63yo)

                Independent Director

                • Tenure: 6.5yrs
                • Compensation: CA$233.47k
              • John Manley (69yo)

                Independent Director

                • Tenure: 8yrs
                • Compensation: CA$251.67k
              • Mary Haddad (63yo)

                Independent Director

                • Tenure: 5.7yrs
                • Compensation: CA$267.54k
              • Rick Hillier (64yo)

                Chairman of Atlantic Canada Community Board

                • Tenure: 11.3yrs
              • Stockwell Day (69yo)

                Independent Director

                • Tenure: 9yrs
                • Compensation: CA$259.20k

              Company Information

              TELUS Corporation's company bio, employee growth, exchange listings and data sources


              Key Information

              • Name: TELUS Corporation
              • Ticker: T
              • Exchange: TSX
              • Founded: 1993
              • Industry: Integrated Telecommunication Services
              • Sector: Telecom
              • Market Cap: CA$31.426b
              • Shares outstanding: 604.59m
              • Website: https://www.telus.com

              Number of Employees


              Location

              • TELUS Corporation
              • 510 West Georgia Street
              • 7th Floor
              • Vancouver
              • British Columbia
              • V6B 0M3
              • Canada

              Listings

              TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
              TTSX (The Toronto Stock Exchange)YesCommon SharesCACADJan 1999
              BCZDB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1999
              TUNYSE (New York Stock Exchange)YesCommon SharesUSUSDJan 1999
              TU NBMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNJan 1999

              Biography

              TELUS Corporation, together with its subsidiaries, provides a range of telecommunications products and services in Canada. It operates through Wireless and Wireline segments. The company’s telecommunications products and services comprise wireless and wireline voice and data services; data services, including Internet protocol; television services; hosting, managed information technology, and cloud-based services; healthcare solutions; customer care and business services; and home and business security solutions. It has 13.4 million subscriber connections, including 9.2 million wireless subscribers, 1.9 million high-speed Internet subscribers, 1.2 million wireline residential network access lines, and 1.1 million TELUS TV subscribers. The company was formerly known as TELUS Communications Inc. and changed its name to TELUS Corporation in February 2005. TELUS Corporation was founded in 1993 and is based in Vancouver, Canada. 


              Company Analysis and Financial Data Status

              All financial data provided by Standard & Poor's Capital IQ.
              DataLast Updated (UTC time)
              Company Analysis2020/01/22 23:49
              End of Day Share Price2020/01/22 00:00
              Earnings2019/09/30
              Annual Earnings2018/12/31


              Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.