OTCPK:TLKG.Y

Stock Analysis Report

Executive Summary

Telkom SA SOC Limited provides information and communications technology services to residential, business, government, wholesale, corporate, and mobile customers in South Africa and internationally.

Snowflake

Fundamentals

Undervalued established dividend payer.

Share Price & News

How has Telkom SA SOC's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

1.3%

TLKG.Y

2.1%

US Telecom

2.3%

US Market


1 Year Return

23.8%

TLKG.Y

10.9%

US Telecom

5.6%

US Market

Return vs Industry: TLKG.Y exceeded the US Telecom industry which returned 10.9% over the past year.

Return vs Market: TLKG.Y exceeded the US Market which returned 5.6% over the past year.


Shareholder returns

TLKG.YIndustryMarket
7 Day1.3%2.1%2.3%
30 Day-6.3%1.0%-1.0%
90 Day-24.9%9.1%-0.7%
1 Year28.3%23.8%16.7%10.9%7.9%5.6%
3 Year27.2%10.5%20.2%2.7%45.6%36.3%
5 Year17.1%-5.1%40.1%8.2%65.8%47.6%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Telkom SA SOC undervalued compared to its fair value and its price relative to the market?

23.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: TLKG.Y ($18.78) is trading below our estimate of fair value ($24.39)

Significantly Undervalued: TLKG.Y is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: TLKG.Y is good value based on its PE Ratio (12.3x) compared to the Telecom industry average (18.8x).

PE vs Market: TLKG.Y is good value based on its PE Ratio (12.3x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: TLKG.Y is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: TLKG.Y is good value based on its PB Ratio (1.2x) compared to the US Telecom industry average (1.4x).


Next Steps

Future Growth

How is Telkom SA SOC forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

13.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TLKG.Y's forecast earnings growth (13.1% per year) is above the savings rate (2.7%).

Earnings vs Market: TLKG.Y's earnings (13.1% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: TLKG.Y's revenue (3.9% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: TLKG.Y's revenue (3.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: TLKG.Y's Return on Equity is forecast to be low in 3 years time (12%).


Next Steps

Past Performance

How has Telkom SA SOC performed over the past 5 years?

4.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TLKG.Y's earnings have grown by 4% per year over the past 5 years.

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

Earnings vs Industry: TLKG.Y had negative earnings growth (-4.2%) over the past year, making it difficult to compare to the Telecom industry average (-23%).


Return on Equity

High ROE: TLKG.Y's Return on Equity (9.5%) is considered low.


Return on Assets

ROA vs Industry: TLKG.Y has a higher Return on Assets than the Telecom industry average last year.


Return on Capital Employed

ROCE Improving: TLKG.Y has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Telkom SA SOC's financial position?


Financial Position Analysis

Short Term Liabilities: TLKG.Y's short term assets (ZAR15.0B) do not cover its short term liabilities (ZAR16.4B)

Long Term Liabilities: TLKG.Y's short term assets (15.0B) exceeds its long term liabilities (6.7B)


Debt to Equity History and Analysis

Debt Level: TLKG.Y's debt to equity ratio (34.7%) is considered satisfactory

Reducing Debt: TLKG.Y's debt to equity ratio has increased from 14.6% to 34.7% over the past 5 years.

Debt Coverage: TLKG.Y's debt is well covered by operating cash flow (73%).

Interest Coverage: TLKG.Y's interest payments on its debt are well covered by EBIT (12.3x coverage).


Balance Sheet

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

Debt Coverage by Assets: TLKG.Y's debt is covered by short term assets (assets are 1.448610x debt).


Next Steps

Dividend

What is Telkom SA SOC's current dividend yield, its reliability and sustainability?

5.21%

Current Dividend Yield


Dividend Yield vs Market

company5.2%marketbottom25%1.5%markettop25%3.8%industryaverage4.8%forecastin3Years6.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: TLKG.Y's dividend (5.21%) is higher than the bottom 25% of dividend payers in the US market (1.46%).

High Dividend: TLKG.Y's dividend (5.21%) is in the top 25% of dividend payers in the US market (3.76%)

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

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


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.3%), TLKG.Y's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TLKG.Y's dividends in 3 years are forecast to be covered by earnings (54% payout ratio).


Next Steps

Management

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

1.3yrs

Average management tenure


CEO

Sipho Maseko (50yo)

6.5yrs

Tenure

SAR24,108,430

Compensation

Mr. Sipho Nkosinathi Maseko, BA, LLB., has been Group Chief Executive Officer and Executive Director of Telkom SA SOC Limited since April 1, 2013. Mr. Maseko is a Director of BMW, Gyro Group and BCX. He se ...


CEO Compensation Analysis

Compensation vs. Market: Sipho's total compensation ($USD1.63M) is about average for companies of similar size in the US market ($USD4.07M).

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


Management Age and Tenure

1.3yrs

Average Tenure

49.5yo

Average Age

Experienced Management: TLKG.Y's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Age and Tenure

6.7yrs

Average Tenure

54yo

Average Age

Experienced Board: TLKG.Y's board of directors are considered experienced (6.7 years average tenure).


Insider Trading

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


Ownership Breakdown


Management Team

  • Deon Fredericks (58yo)

    Chief Investment Officer

    • Tenure: 1.3yrs
    • Compensation: SAR11.18m
  • Melody Lekota (48yo)

    Chief Human Resources Officer

    • Tenure: 2.6yrs
    • Compensation: SAR6.41m
  • Sipho Maseko (50yo)

    Group CEO & Executive Director

    • Tenure: 6.5yrs
    • Compensation: SAR24.11m
  • Alphonzo Samuels (53yo)

    Chief Executive Officer of Openserve

    • Tenure: 4yrs
    • Compensation: SAR10.12m
  • Althon Beukes (48yo)

    Group Chief Information Officer

    • Tenure: 0.8yrs
    • Compensation: SAR5.23m
  • Tsholofelo B. Molefe (50yo)

    Group CFO & Executive Director

    • Tenure: 1.3yrs
    • Compensation: SAR8.18m
  • Serame Taukobong (49yo)

    Chief Executive Officer of Consumer & Small Business

    • Tenure: 1.3yrs
    • Compensation: SAR10.13m
  • P. Bogoshi (53yo)

    Chief Executive Officer of BCX Group

    • Tenure: 1.3yrs
    • Compensation: SAR7.96m
  • C. Moganwa (41yo)

    Chief Officer Business Markets

    • Tenure: 0.8yrs
    • Compensation: SAR5.17m
  • Lesiba Maloba (45yo)

    Chief Executive Officer of Gyro Group

    • Tenure: 1.9yrs
    • Compensation: SAR5.63m

Board Members

  • Santie Botha (54yo)

    Independent Non-Executive Director

    • Tenure: 6.8yrs
    • Compensation: SAR666.90k
  • Louis von Zeuner (58yo)

    Independent Non-Executive Director

    • Tenure: 6.8yrs
    • Compensation: SAR914.73k
  • P.C. Luthuli (45yo)

    Independent Non-Executive Director

    • Tenure: 1.4yrs
    • Compensation: SAR513.71k
  • Keith Rayner (62yo)

    Independent Non-Executive Director

    • Tenure: 0.3yrs
  • Navin Kapila (65yo)

    Independent Non-Executive Director

    • Tenure: 8.7yrs
    • Compensation: SAR867.90k
  • Sipho Maseko (50yo)

    Group CEO & Executive Director

    • Tenure: 6.5yrs
    • Compensation: SAR24.11m
  • Khanyisile Kweyama (55yo)

    Independent Non-Executive Director

    • Tenure: 6.8yrs
    • Compensation: SAR626.00k
  • Tsholofelo B. Molefe (50yo)

    Group CFO & Executive Director

    • Tenure: 1.3yrs
    • Compensation: SAR8.18m
  • Fagmeedah Petersen-Cook (43yo)

    Independent Non-Executive Director

    • Tenure: 6.8yrs
    • Compensation: SAR816.28k
  • M. Moloko (54yo)

    Independent Chairman of the Board

    • Tenure: 0.3yrs

Company Information

Telkom SA SOC Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Telkom SA SOC Limited
  • Ticker: TLKG.Y
  • Exchange: OTCPK
  • Founded: 1991
  • Industry: Integrated Telecommunication Services
  • Sector: Telecom
  • Market Cap: SAR34.471b
  • Listing Market Cap: SAR2.331b
  • Shares outstanding: 496.85m
  • Website: https://www.telkom.co.za

Number of Employees


Location

  • Telkom SA SOC Limited
  • 61 Oak Avenue
  • Highveld Park
  • Centurion
  • Gauteng
  • 157
  • South Africa

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TLKG.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDMar 2003
TKGJSE (The Johannesburg Securities Exchange)YesOrdinary SharesZAZARMar 2003
TZL1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2003

Biography

Telkom SA SOC Limited provides information and communications technology services to residential, business, government, wholesale, corporate, and mobile customers in South Africa and internationally. The c ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/17 23:43
End of Day Share Price2019/10/16 00:00
Earnings2019/03/31
Annual Earnings2019/03/31


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.