NYSE:CTL

Stock Analysis Report

Executive Summary

CenturyLink, Inc. provides various communications services to residential, business, wholesale, and governmental customers in the United States and internationally.

Rewards

Trading at 68.5% below its fair value

Earnings are forecast to grow 51.71% per year

Risk Analysis

Dividend of 7.59% is not well covered by earnings

Shareholders have been diluted in the past year



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

3.4%

CTL

-0.5%

US Telecom

-2.7%

US Market


1 Year Return

-3.6%

CTL

16.1%

US Telecom

21.2%

US Market

Return vs Industry: CTL underperformed the US Telecom industry which returned 12% over the past year.

Return vs Market: CTL underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

CTLIndustryMarket
7 Day3.4%-0.5%-2.7%
30 Day8.3%-2.0%0.09%
90 Day13.2%0.4%6.9%
1 Year4.7%-3.6%21.8%16.1%23.8%21.2%
3 Year-23.3%-43.7%17.7%0.5%48.1%38.6%
5 Year-39.9%-62.0%42.9%10.6%72.5%53.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: CTL ($13.18) is trading below our estimate of fair value ($41.87)

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


Price To Earnings Ratio

PE vs Industry: CTL is unprofitable, so we can't compare its PE Ratio to the Telecom industry average.

PE vs Market: CTL is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate CTL's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: CTL is good value based on its PB Ratio (1.1x) compared to the US Telecom industry average (1.5x).


Next Steps

Future Growth

How is CenturyLink forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

64.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CTL is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.7%).

Earnings vs Market: CTL is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: CTL's is expected to become profitable in the next 3 years.

Revenue vs Market: CTL's revenue is expected to decline over the next 3 years (-2% per year).

High Growth Revenue: CTL's revenue is forecast to decline over the next 3 years (-2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CTL's Return on Equity is forecast to be low in 3 years time (9%).


Next Steps

Past Performance

How has CenturyLink performed over the past 5 years?

-64.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CTL is currently unprofitable.

Growing Profit Margin: CTL is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: CTL is unprofitable, and losses have increased over the past 5 years at a rate of -64.1% per year.

Accelerating Growth: Unable to compare CTL's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: CTL is unprofitable, making it difficult to compare its past year earnings growth to the Telecom industry (-43.1%).


Return on Equity

High ROE: CTL has a negative Return on Equity (-57.8%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is CenturyLink's financial position?


Financial Position Analysis

Short Term Liabilities: CTL's short term assets ($4.6B) do not cover its short term liabilities ($6.6B).

Long Term Liabilities: CTL's short term assets ($4.6B) do not cover its long term liabilities ($44.5B).


Debt to Equity History and Analysis

Debt Level: CTL's debt to equity ratio (255.3%) is considered high.

Reducing Debt: CTL's debt to equity ratio has increased from 128.7% to 255.3% over the past 5 years.


Balance Sheet

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

Debt Coverage by Assets: CTL's debt is not covered by short term assets (assets are 0.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable CTL has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: CTL is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 45.3% per year.


Next Steps

Dividend

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

6.88%

Current Dividend Yield


Dividend Yield vs Market

company6.9%marketbottom25%1.4%markettop25%3.7%industryaverage4.9%forecastin3Years6.9%

Current dividend yield vs market & industry

Notable Dividend: CTL's dividend (7.59%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: CTL's dividend (7.59%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

Stable Dividend: CTL's dividend payments have been volatile in the past 10 years.

Growing Dividend: CTL's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: CTL is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: CTL's dividends in 3 years are forecast to be covered by earnings (72.6% payout ratio).


Next Steps

Management

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

1.7yrs

Average management tenure


CEO

Jeff Storey (58yo)

1.7yrs

Tenure

US$35,655,646

Compensation

Mr. Jeffrey K. Storey, also known as Jeff, has been Chief Executive Officer of CenturyLink Inc. since May 2018. Mr. Storey serves as Chief Executive Officer and President of Qwest Corporation. Mr. Storey h ...


CEO Compensation Analysis

Compensation vs Market: Jeff's total compensation ($USD35.66M) is above average for companies of similar size in the US market ($USD10.76M).

Compensation vs Earnings: Jeff's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

1.7yrs

Average Tenure

54.5yo

Average Age

Experienced Management: CTL's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Age and Tenure

6.5yrs

Average Tenure

64yo

Average Age

Experienced Board: CTL's board of directors are considered experienced (6.5 years average tenure).


Insider Trading

Insider Buying: CTL insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$43,01711 Dec 19
Laurie Siegel
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,072
Max PriceUS$14.00
BuyUS$106,30030 May 19
W. Hanks
EntityIndividual
Role
Vice Chairman
Vice Chairman & Lead Independent Director
Shares10,000
Max PriceUS$10.63
BuyUS$196,60024 May 19
T. Glenn
EntityIndividual
Shares20,000
Max PriceUS$9.83
BuyUS$491,48023 May 19
Jeffrey Storey
EntityIndividual
Role
Chief Executive Officer
President
Shares50,000
Max PriceUS$9.83
BuyUS$147,15523 May 19
Indraneel Dev
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares15,000
Max PriceUS$9.85
BuyUS$109,19215 May 19
Harvey Perry
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares10,000
Max PriceUS$10.92
BuyUS$404,25013 May 19
Steven Clontz
EntityIndividual
Shares37,000
Max PriceUS$11.00
BuyUS$24,60814 Mar 19
Kevin Chilton
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceUS$12.30
BuyUS$95,60007 Mar 19
Steven Clontz
EntityIndividual
Shares8,000
Max PriceUS$11.95
BuyUS$587,50006 Mar 19
Indraneel Dev
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares50,000
Max PriceUS$11.75
BuyUS$991,26106 Mar 19
Jeffrey Storey
EntityIndividual
Role
Chief Executive Officer
President
Shares83,000
Max PriceUS$11.94
SellUS$18,161,09219 Feb 19
Southeastern Asset Management, Inc.
EntityCompany
Shares1,093,383
Max PriceUS$16.61
BuyUS$77,592,77619 Feb 19
Southeastern Asset Management, Inc.
EntityCompany
Shares4,795,598
Max PriceUS$16.18

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.8%.


Management Team

  • Jeff Storey (58yo)

    President

    • Tenure: 1.7yrs
    • Compensation: US$35.66m
  • Stacey Goff (53yo)

    Chief Administrative Officer

    • Tenure: 5.2yrs
    • Compensation: US$3.58m
  • Eric Mortensen (59yo)

    Principal Accounting Officer

    • Tenure: 1.8yrs
  • Bryan Taylor

    Vice President of Corporate Development

    • Tenure: 13.5yrs
  • Neel Dev (47yo)

    Executive VP & CFO

    • Tenure: 1.3yrs
    • Compensation: US$2.73m
  • Shaun Andrews (56yo)

    Executive VP & Chief Marketing Officer

    • Tenure: 1yrs
  • Scott Trezise (50yo)

    Executive Vice President of Human Resources

    • Tenure: 6.4yrs
    • Compensation: US$1.86m
  • Andrew Dugan

    Chief Technology Officer

    • Mark Stoutenberg

      Senior Director of Investor Relations

      • Tenure: 1.6yrs
    • Valerie Finberg

      Vice President of Investor Relations


      Board Members

      • Peter Brown (60yo)

        Independent Director

        • Tenure: 10.5yrs
        • Compensation: US$276.69k
      • Glen Post (66yo)

        Director

        • Tenure: 35yrs
        • Compensation: US$10.74m
      • W. Hanks (64yo)

        Vice Chairman & Lead Independent Director

        • Tenure: 2.7yrs
        • Compensation: US$413.62k
      • Harvey Perry (74yo)

        Chairman of the Board

        • Tenure: 2.7yrs
        • Compensation: US$475.91k
      • Jeff Storey (58yo)

        President

        • Tenure: 1.7yrs
        • Compensation: US$35.66m
      • Virginia Boulet (65yo)

        Independent Director

        • Tenure: 25yrs
        • Compensation: US$295.44k
      • Laurie Siegel (63yo)

        Independent Director

        • Tenure: 10.5yrs
        • Compensation: US$321.51k
      • Mike Roberts (68yo)

        Independent Director

        • Tenure: 8.8yrs
        • Compensation: US$303.44k
      • Chili Chilton (64yo)

        Independent Director

        • Tenure: 2.2yrs
        • Compensation: US$301.69k
      • Mary Landrieu (63yo)

        Independent Director

        • Tenure: 4.2yrs
        • Compensation: US$276.44k

      Company Information

      CenturyLink, Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: CenturyLink, Inc.
      • Ticker: CTL
      • Exchange: NYSE
      • Founded: 1968
      • Industry: Alternative Carriers
      • Sector: Telecom
      • Market Cap: US$15.852b
      • Shares outstanding: 1.09b
      • Website: https://www.centurylink.com

      Number of Employees


      Location

      • CenturyLink, Inc.
      • 100 CenturyLink Drive
      • Monroe
      • Louisiana
      • 71203
      • United States

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      CTLNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1972
      CYTDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1972
      CTL *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 1972
      0HVPLSE (London Stock Exchange)YesCommon StockGBUSDDec 1972
      CYTETLX (Eurotlx)YesCommon StockITEURDec 1972
      C1TL34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REPR 1 COMBRBRLDec 2019

      Biography

      CenturyLink, Inc. provides various communications services to residential, business, wholesale, and governmental customers in the United States and internationally. The company operates in two segments, Business and Consumer. It offers VPN data network services; Ethernet services; Internet protocol (IP) services; facilities-based Prism TV service, as well as satellite digital television services; CDN services; and Vyvx broadcast services. The company also provides broadband services, which allow customers to connect to the Internet through their existing telephone lines or fiber-optic cables; private line services for transmission of data between sites; wavelength services; and colocation and data center services, such as hosting, cloud, and managed solutions. In addition, it offers network management, installation and maintenance of data equipment, and building of fiber-optic broadband networks; professional services; and network security services, as well as sells equipment. Further, the company offers voice services; voice over IP services; and managed services comprising network, hosting, cloud, and information technology services, as well as leases and subleases space in its office buildings, warehouses, and other properties. As of December 31, 2018, it served approximately 4.8 million broadband subscribers. CenturyLink, Inc. was founded in 1968 and is headquartered in Monroe, Louisiana. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/27 23:52
      End of Day Share Price2020/01/27 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.