TMX  Telefonos De Mexico

Exchange

NYSE

Sector

Public Utilities

Industry

Telecommunications Equipment

Market Cap.

13.820B

Vuru Grade

58.42/100

Current Price

$15.33
-0.23 (-1.48%)

Growth Price

$10.72
Overvalued by 30.04%

Stability Price

$3.36
Overvalued by 78.08%

Company Metrics

  • P/E 12.97
  • P/S 1.63
  • P/B 3.78
  • EPS 1.2
  • Cash ROIC 20.96%
  • Cash Ratio 0.22
  • Dividend 0.868 / 5.58%
  • Avg. Vol. 449,758.00
  • Shares 901.50M
  • Market Cap. 13.820B

Company Description

Telefonos de Mexico, S.A.B. de C.V. provides telecommunications services primarily in Mexico. It offers local telephone service; domestic and international long distance services; and interconnection services to long-distance, local, and mobile phone carriers. The company also provides data services, including corporate network services consisting of transmission of voice, video, and data between ... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

There is no news available at this time.
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for TMX to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate TMX's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$15.33 Current Price

$10.72 Growth Price (DCF)

Overvalued by 30.04%


Growth Rate Assumed by Market: 8.67%


Future Free Cash Flow Growth Rate: -5.4%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$3.36 Stability Price (EPV)

Overvalued by 78.08%


Discount Rate: 15.0%

$117.92 Book Price

Undervalued by 669.19%


Excellent Cash Return on Invested Capital over the past 5 years

TMX has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. Annual Reports can be useful in identifying the cause of one-time events and future sustainability.

TMX has created $20.96 of cash for every $100 invested.
Figures in MXN. Fiscal year ends in December
20072008200920102011
Free Cash Flow 17.39B 33.20B 29.62B 30.21B 12.93B
divided by
Invested Capital 135.05B 119.21B 115.19B 110.61B 117.07B
Cash ROIC 12.87% 27.85% 25.72% 27.31% 11.05%

Excellent Return on Equity over the past 5 years

Over the past 5 years, TMX has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

TMX has generated $50.80 of Earnings for every $100 of Shareholders' Equity.
Figures in MXN. Fiscal year ends in December
20072008200920102011
Net Income 35.65B 20.18B 20.47B 15.38B 14.60B
divided by
Stockholders' Equity 42.30B 39.33B 38.28B 43.91B 48.78B
Return on Equity 84.26% 51.30% 53.47% 35.03% 29.94%

Excellent Business Performance over the past 10 years

TMX has been able to maintain profitability in good times and bad. This could mean TMX has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

TMX has created positive free cash flow for 9 or more of the past 10 years.
Figures in MXN. Fiscal year ends in December
2002200320042005200620072008200920102011
Free Cash Flow 25.66B 22.07B 41.38B 27.58B 32.62B 17.39B 33.20B 29.62B 30.21B 12.93B

Weak Balance Sheet

TMX's financial position is not ideal. The key is to check whether TMX is using debt to fuel its growth and the sustainability of that tendency. Highly capital intensive businesses (see Economic Moat) follow this route, which can deeply impact the future prospects of the business.
Figures in MXN. Fiscal year ends in December
2002200320042005200620072008200920102011
Cash 14.56B 17.56B 26.66B 23.10B 18.88B 5.44B 26.56B 25.88B 14.45B 7.91B
Current Assets 36.71B 39.66B 60.44B 55.05B 60.38B 30.79B 52.18B 51.84B 37.00B 36.23B
Total Assets 171.27B 185.93B 253.42B 248.28B 262.84B 173.19B 187.13B 178.36B 157.75B 160.76B
Current Liabilities 32.35B 37.28B 48.83B 44.47B 51.40B 32.70B 41.36B 37.29B 32.69B 35.79B
Total Liabilities 109.21B 106.21B 159.51B 147.53B 160.10B 130.88B 147.80B 140.08B 113.84B 111.98B
Stockholder' Equity 62.06B 79.72B 93.91B 100.75B 102.75B 42.30B 39.33B 38.28B 43.91B 48.78B
Current Ratio 1.13 1.06 1.24 1.24 1.17 0.94 1.26 1.39 1.13 1.01
TL-to-TA 0.64 0.57 0.63 0.59 0.61 0.76 0.79 0.79 0.72 0.70

Low or No Reinvestment of Profits over the past 10 years

TMX has either been retaining a small amount of their earnings or has done so inconsistently. A lack of consistency could be due to TMX operating at a loss or them having such a strong economic moat they feel comfortable spending profits on growth. Be wary of future prospects and if applicable, inspect the moat's sustainability.
Figures in MXN. Fiscal year ends in December
2002200320042005200620072008200920102011
Retained Earnings 95.34B 101.57B 113.39B 124.27B 129.03B 112.04B 27.37B 28.38B 34.52B 43.44B
Retained Earnings Growth - 6.54% 11.63% 9.60% 3.84% -13.17% -75.57% 3.66% 21.65% 25.83%

Potential Competitive Advantage over the past 10 years

TMX potentially has a competitive advantage. This could be strong branding, the ability to keep costs low, or some other characteristic that is hard to replicate. Look at its future prospects to determine sustainability and whether the economic moat will strengthen.

$17.74 of every $100 of Revenue have been pure profit, on average over the past 10 years.
Figures in MXN. Fiscal year ends in December
2002200320042005200620072008200920102011
Net Income 19.85B 22.47B 27.85B 27.99B 28.41B 35.65B 20.18B 20.47B 15.38B 14.60B
divided by
Revenue 114.52B 116.95B 138.86B 161.83B 174.23B 131.34B 124.11B 119.10B 113.56B 112.07B
Net Profit Margin 17.33% 19.21% 20.05% 17.29% 16.31% 27.14% 16.26% 17.19% 13.55% 13.03%

Strong Pricing Power over the past 10 years

TMX has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$69.18 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in MXN. Fiscal year ends in December
2002200320042005200620072008200920102011
Gross Profit 76.85B 89.86B 108.71B 99.82B 107.40B 98.84B 91.30B 84.94B 68.29B 73.95B
divided by
Revenue 114.52B 116.95B 138.86B 161.83B 174.23B 131.34B 124.11B 119.10B 113.56B 112.07B
Gross Margin 67.11% 76.83% 78.28% 61.68% 61.65% 75.25% 73.57% 71.32% 60.14% 65.99%

High Capital Intensity over the past 10 years

TMX spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

64.18% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in MXN. Fiscal year ends in December
2002200320042005200620072008200920102011
Capital Expenditure 11.60B 9.93B 19.59B 23.28B 21.06B 13.90B 12.71B 10.61B 9.27B 14.23B
divided by
Net Income 19.85B 22.47B 27.85B 27.99B 28.41B 35.65B 20.18B 20.47B 15.38B 14.60B
Capital Expenditure Ratio 58.46% 44.21% 70.36% 83.16% 74.12% 39.01% 62.98% 51.85% 60.26% 97.43%

Very Strong Dividend History over the past 10 years

TMX has consistently distributed a dividend for at least the past 10 years. Such a long dividend history suggests TMX is very established in its market and that its dividend distribution is likely to continue for a significant period of time.
Figures in MXN. Fiscal year ends in December
2002200320042005200620072008200920102011
Dividend Paid 7.31B 7.63B 8.15B 8.50B 8.49B 8.86B 7.61B 15.09B 8.74B 9.51B
divided by
Shares Outstanding 1.37B 1.31B 1.22B 1.14B 1.05B 988.30M 945.30M 919.15M 909.45M 902.90M
Dividend Paid Per Share 0.44 0.48 0.55 0.62 0.67 0.74 0.67 1.36 0.80 0.87
Price at Year End 6.51 6.99 8.42 11.15 13.18 17.76 17.41 15.06 15.25 14.44
Dividend Yield 6.83% 6.92% 6.59% 5.53% 5.11% 4.19% 3.84% 9.06% 5.23% 6.06%

Strong History of Stock Buybacks over the past 10 years

TMX has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in MXN. Fiscal year ends in December
2002200320042005200620072008200920102011
Shares Outstanding 1.37B 1.31B 1.22B 1.14B 1.05B 988.30M 945.30M 919.15M 909.45M 902.90M
Stock Bought Back - 4.28% 7.37% 6.60% 9.28% 5.98% 4.55% 2.85% 1.07% 0.73%
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