Telus reported a decent start to 2024. Wireless performance held up despite heightened industry competition, and broadband customer additions remained strong. Telus’ fiber network investment continues to pay off. Now, as its buildout nears its end, the firm is in a good position to continue to expand cash flow and profits. We’re maintaining our CAD 33 fair value estimate and believe shares are undervalued.
With its buildout of a fiber fixed-line network, Telus' network quality has eclipsed that of primary competitor Shaw over much of its footprint. This should propel continued strength in wireline pricing, margins, and share gains.
A combined Quebecor and Freedom Mobile should make for Canada’s strongest-ever fourth national wireless competitor, and it will undercut the Big Three on price, limiting pricing power and pressuring margins.
|
Metric
|
T
|
BCE
|
RCI
|
|---|---|---|---|
Price/Earnings (Normalized) | 22.22 | 15.15 | 11.88 |
Price/Book Value | 2.05 | 2.59 | 2.70 |
Price/Sales | 1.64 | 1.73 | 1.40 |
Price/Cash Flow | 6.88 | 5.50 | 4.63 |
|
Metric
|
T
|
BCE
|
RCI
|
|---|---|---|---|
Quick Ratio | 0.62 | 0.52 | 0.71 |
Current Ratio | 0.75 | 0.65 | 0.89 |
Interest Coverage | 1.71 | 3.05 | 1.59 |
|
Metric
|
T
|
BCE
|
RCI
|
|---|---|---|---|
Return on Assets (Normalized) | 2.44% | 3.96% | 3.56% |
Return on Equity (Normalized) | 8.45% | 16.39% | 22.19% |
Return on Invested Capital (Normalized) | 5.31% | 6.68% | 6.65% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
TMUS
| T-Mobile US Inc | Ncxbgfbnb | Pqwymr | $190.3 Bil | |
VZ
| Verizon Communications Inc | Gmmkjscr | Qbsnrg | $170.4 Bil | |
CMCSA
| Comcast Corp Class A | Tzlfjksj | Bzqr | $154.0 Bil | |
T
| AT&T Inc | Prdmh | Sdndrp | $124.3 Bil | |
DTEGY
| Deutsche Telekom AG ADR | Trkdctyn | Vpkbmkk | $118.3 Bil | |
AMX
| America Movil SAB de CV ADR - Series B | Wjglghxnh | Kzqjlgp | $61.2 Bil | |
KDDIY
| KDDI Corp ADR | Mtjkptnp | Klkdxd | $58.7 Bil | |
CHTR
| Charter Communications Inc Class A | Wqjnddgq | Fnvqdnd | $39.1 Bil | |
BCE
| BCE Inc | Nldlyxdgc | Zgwvbw | $31.1 Bil | |
ORAN
| Orange SA ADR | Qlqjswyq | Hyb | $30.6 Bil |
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