NYSE:SKM

Stock Analysis Report

Executive Summary

SK Telecom Co., Ltd. provides wireless telecommunication services in South Korea.

Rewards

Trading at 34% below its fair value

Earnings are forecast to grow 33.34% per year

Pays a high and reliable dividend of 5.15%

Risk Analysis

Has a high level of debt

Highly volatile share price over past 3 months

Profit margins (4.9%) are lower than last year (18.4%)

Shareholders have been diluted in the past year



Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: SKM's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

7.1%

SKM

4.3%

US Wireless Telecom

9.4%

US Market


1 Year Return

-26.4%

SKM

13.5%

US Wireless Telecom

-6.8%

US Market

Return vs Industry: SKM underperformed the US Wireless Telecom industry which returned 14.6% over the past year.

Return vs Market: SKM underperformed the US Market which returned -8.1% over the past year.


Shareholder returns

SKMIndustryMarket
7 Day7.1%4.3%9.4%
30 Day-10.6%-2.1%-3.9%
90 Day-20.1%11.1%-16.5%
1 Year-26.3%-26.4%14.8%13.5%-4.8%-6.8%
3 Year-21.5%-26.1%16.4%12.7%23.4%15.2%
5 Year-29.9%-36.4%83.8%68.1%41.3%25.7%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

42.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: SKM ($17.85) is trading below our estimate of fair value ($27.05)

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


Price To Earnings Ratio

PE vs Industry: SKM is good value based on its PE Ratio (16x) compared to the Wireless Telecom industry average (20.6x).

PE vs Market: SKM is poor value based on its PE Ratio (16x) compared to the US market (13.3x).


Price to Earnings Growth Ratio

PEG Ratio: SKM is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: SKM is good value based on its PB Ratio (0.6x) compared to the US Wireless Telecom industry average (1.5x).


Next Steps

Future Growth

How is SK TelecomLtd forecast to perform in the next 1 to 3 years based on estimates from 29 analysts?

31.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: SKM's forecast earnings growth (33.3% per year) is above the savings rate (1.7%).

Earnings vs Market: SKM's earnings (33.3% per year) are forecast to grow faster than the US market (13.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: SKM's revenue (4% per year) is forecast to grow slower than the US market (6.9% per year).

High Growth Revenue: SKM's revenue (4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: SKM's Return on Equity is forecast to be low in 3 years time (8.4%).


Next Steps

Past Performance

How has SK TelecomLtd performed over the past 5 years?

6.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: SKM has high quality earnings.

Growing Profit Margin: SKM's current net profit margins (4.9%) are lower than last year (18.4%).


Past Earnings Growth Analysis

Earnings Trend: SKM's earnings have grown by 6.5% per year over the past 5 years.

Accelerating Growth: SKM's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: SKM had negative earnings growth (-71.9%) over the past year, making it difficult to compare to the Wireless Telecom industry average (-10.4%).


Return on Equity

High ROE: SKM's Return on Equity (3.8%) is considered low.


Next Steps

Financial Health

How is SK TelecomLtd's financial position?


Financial Position Analysis

Short Term Liabilities: SKM's short term assets (₩8,102.3B) exceed its short term liabilities (₩7,787.7B).

Long Term Liabilities: SKM's short term assets (₩8,102.3B) do not cover its long term liabilities (₩14,000.4B).


Debt to Equity History and Analysis

Debt Level: SKM's debt to equity ratio (45%) is considered high.

Reducing Debt: SKM's debt to equity ratio has reduced from 50.7% to 45% over the past 5 years.

Debt Coverage: SKM's debt is well covered by operating cash flow (38.8%).

Interest Coverage: SKM's interest payments on its debt are well covered by EBIT (3.4x coverage).


Balance Sheet


Next Steps

Dividend

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

5.15%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: SKM's dividend (5.15%) is higher than the bottom 25% of dividend payers in the US market (1.89%).

High Dividend: SKM's dividend (5.15%) is low compared to the top 25% of dividend payers in the US market (5.26%).


Stability and Growth of Payments

Stable Dividend: SKM's dividends per share have been stable in the past 10 years.

Growing Dividend: SKM's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (82.3%), SKM's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: SKM's dividends in 3 years are forecast to be well covered by earnings (31.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average board tenure


CEO

Jung-ho Park (56yo)

3.25s

Tenure

₩3,506,000,000

Compensation

Mr. Jung-Ho Park has been the Chief Executive Officer of SK Telecom Co., Ltd. since January 1, 2017 and has been its President and Executive Director since March 2017. Mr. Park served as the Chief Executiv ...


CEO Compensation Analysis

Compensation vs Market: Jung-ho's total compensation ($USD2.89M) is below average for companies of similar size in the US market ($USD11.77M).

Compensation vs Earnings: Jung-ho's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Jung-ho Park
President3.25yrs₩3.51b0.0034% 398.3k
Youngsang Ryu
Executive Director & Head of MNO Business2.17yrs₩579.00m0.00068% 79.2k
Dae-Sik Cho
Non-Executive Director3.08yrsno datano data
Jung-Ho Ahn
Independent Director3.08yrsno datano data
Young Min Yoon
Independent Non-Executive Director2.08yrsno datano data
Seok Dong Kim
Independent Director1.08yrsno datano data
Yong Hak Kim
Independent Chairman of the Board0.083yrno datano data
Junmo Kim
Independent Director0.083yrno datano data

2.1yrs

Average Tenure

56yo

Average Age

Experienced Board: SKM's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2%.


Top Shareholders

Company Information

SK Telecom Co.,Ltd's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: SK Telecom Co.,Ltd
  • Ticker: SKM
  • Exchange: NYSE
  • Founded: 1984
  • Industry: Wireless Telecommunication Services
  • Sector: Telecom
  • Market Cap: ₩14.152t
  • Listing Market Cap: ₩11.648b
  • Shares outstanding: 73.14m
  • Website: https://www.sktelecom.com

Number of Employees


Location

  • SK Telecom Co.,Ltd
  • SK T-Tower
  • 65, Eulji-ro
  • Seoul
  • 4539
  • South Korea

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
A017670KOSE (Korea Stock Exchange)YesCommon StockKRKRWJan 1992
SKMNYSE (New York Stock Exchange)SPONSORED ADRUSUSDJun 1996
SKMDLSE (London Stock Exchange)SPONSORED ADRGBUSDJun 1996
KMBMUN (Boerse Muenchen)SPONSORED ADRDEEURJun 1996
SKMDLBATS-CHIXE (BATS 'Chi-X Europe')SPONSORED ADRGBUSDJun 1996

Biography

SK Telecom Co., Ltd. provides wireless telecommunication services in South Korea. It operates in four segments: Cellular Services, Fixed-Line Telecommunication Services, E-Commerce Services, and Other Businesses. The Cellular Services segment offers wireless voice and data transmission, cellular global roaming, interconnection, Internet of Things, and platform services, as well as sells smartphones, basic phones, tablets and other Internet access devices, and wearable devices. As of December 31, 2018, it had 30.9 million wireless subscribers. The Fixed-Line Telecommunication Services segment provides local, domestic and international long distance, and voice over Internet protocol services; broadband Internet access services; Internet protocol TV and mobile over-the-top services; and leased line solutions, Internet data center solutions, and network solution services, as well as operates television shopping network. The E-Commerce Services operates 11st, an online open marketplace; and 11Pay, a payment service. The Other Businesses segment provides portal services; residential and small business electronic security, and other related alarm monitoring services; and audio devices. It also operates Syrup Wallet, a mobile wallet service; OK Cashbag, a loyalty points program; and One Store, a mobile application marketplace. The company also provides call center management, base station maintenance, information gathering and consulting, system software development and supply, quantum information and communications, data base and Internet Website, and digital contents sourcing services; manufactures and sells e-book; sells contents and mastering quality sound album; sells and trades in anti-theft devices; operates information and communications facilities; and retails communications devices, and agro-fisheries and livestock. SK Telecom Co., Ltd. has a strategic partnership with Microsoft Corp. The company was founded in 1984 and is headquartered in Seoul, South Korea. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/10 10:00
End of Day Share Price2020/04/09 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.