Telefonica S.A. (ADR) ($TEF) Confident Investor Rating: Poor


Company name Telefonica S.A. (ADR)
Stock ticker TEF
Live stock price [stckqut]TEF[/stckqut]
P/E compared to competitors Good
Employee productivity Poor
Sales growth Poor
EPS growth Poor
P/E growth Good
EBIT growth Poor
Confident Investor Rating Poor
Target stock price (TWCA growth scenario) $7.09
Target stock price (averages with growth) $22.3
Target stock price (averages with no growth) $37.35
Target stock price (manual assumptions) $14.78

The following company description is from Google Finance:

Telefonica, S.A. (Telefonica) together with its subsidiaries and investees operates in the telecommunications, media and contact center industries. Telefonica’s basic purpose is the provision of all manner of public or private telecommunications services, including ancillary or complementary telecommunications services or related services. It operates in three business segments: Telefonica Spain, Telefonica Europe and Telefonica Latin America. On October 26, 2010, it acquired Portugal Telecom’s, a 50% interest in Brasilcel. On September 27, 2010, it acquired 50% of the interest of Brasilcel (a Dutch company that owns interest representing, approximately, 60% of the interest capital stock of Brazilian company Vivo Participacoes, S.A.). On February 16, 2010, it completed the acquisition of 100% of the interest of HanseNet Telekommunikation GmbH. In January 2010, the Telefonica Group, through its wholly owned subsidiary Telefonica Europe Plc, acquired 100% of the interest of Jajah Inc.

Confident Investor comments: At this price and at this time, I do not think that a Confident Investor can confidently invest in this stock.


  1. Nice job there Billy. Forgot to note the enormous dividend TEF has been paying since 1987, with the only exception being a stretch from 1999-2002. TEF is a cash cow

  2. Author

    Joe –

    I don’t think their dividend makes up for their drop in value of the principal (the stock price). In the last 4 years that stock has dropped roughly in half while the dividend hasn’t made up for that shortfall.

    If you would have bought the stock 4 years ago and just held it, my quick back of the envelope calculation shows that you would be slightly in the red right now. The stock split sometime in that period so I didn’t calculate the total cash flow over the entire time.

    The year over year growth numbers for this company are not very impressive. There are better places to invest than this company.

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