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Telefonica Brasil SA ADR VIV

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Stock XNYS Rating as of
$13.94 +0.49 (3.64%)
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Vivo's Position in Brazil is Solid, but We'd Like to See Prices Rise Consistently

Michael Hodel

We believe Telefonica Brasil (Vivo) is one of the strongest telecom carriers in Brazil, vying with America Movil to offer converged wireless and broadband services across much of the country. Consolidation has made the wireless industry much more attractive, but the market still faces several challenges, including a fragmented fixed-line industry, coupled with economic and political instability.

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Price vs Fair Value

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VIV is trading at a LOCK|sZmHJ$^ premium.
Price
$13.94
Fair Value
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Uncertainty
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1-Star Price
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5-Star Price
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Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Vivo is the largest telecom carrier in Brazil and benefits from scale-based cost advantages in both the wireless and fixed-line markets.

Bears

The telecom market in Brazil has been plagued by price wars that have prohibited all carriers from consistently earning economic profits.

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Trading Information

Previous Close Price
$13.45
Day Range
$13.70–14.01
52-Week Range
$10.79–17.26
Bid/Ask
$13.64 / $14.50
Shares Outstanding
1.60B
Market Cap
$22.27B
Volume/Avg
885,394 / 1M

Key Statistics

Price/Earnings (Normalized)
19.26
Price/Sales
1.92
Dividend Yield (Trailing)
6.78%
Dividend Yield (Forward)
6.78%
Total Yield
9.56%

Company Profile

Telefonica Brasil, known as Vivo, is the largest wireless carrier in Brazil with 103 million customers, which is equal to about 38% market share. The firm is strongest in the postpaid business, where it has 72 million customers, or about 40% share of this market. Wireless services and equipment contribute about 70% of total revenue. Vivo is the incumbent fixed-line telephone operator in Sao Paulo state and also owns an extensive fiber network across the country. The firm provides internet access to 8 million households on this network. The firm also sells pay-TV and phone services to its fixed-line customers. Finally, corporate data and IT services, including cloud computing support, contribute about 10% of total revenue.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Core
Total Number of Employees
35,010
Website
https://www.telefonica.com.br

Competitors

Valuation

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Metric
VIV
TIMB
AMX
Price/Earnings (Normalized)
 19.2615.1719.88
Price/Book Value
 1.612.263.27
Price/Sales
 1.922.121.54
Price/Cash Flow
 4.824.515.35
Price/Earnings
VIV
TIMB
AMX

Financial Strength

Metric
VIV
TIMB
AMX
Quick Ratio
 0.860.800.62
Current Ratio
 1.100.920.72
Interest Coverage
 5.332.242.94
Quick Ratio
VIV
TIMB
AMX

Profitability

Metric
VIV
TIMB
AMX
Return on Assets (Normalized)
 4.92%7.87%5.10%
Return on Equity (Normalized)
 9.12%18.25%22.40%
Return on Invested Capital (Normalized)
 7.35%14.30%11.27%
Return on Assets
VIV
TIMB
AMX

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