Telefonica (NYSE: TEF) shares currently have a dividend yield of 6.00%. Telefonica, S.A. provides fixed and mobile communication services primarily in Europe and Latin America. The company offers mobile voice, value added, mobile data and Internet, wholesale, corporate, roaming, fixed wireless, and trunking and paging services, as well as mobile payment solutions. The average volume for Telefonica has been 1,198,400 shares per day over the past 30 days. Telefonica has a market cap of $71.2 billion and is part of the telecommunications industry. Shares are up 15.1% year-to-date as of the close of trading on Tuesday. TheStreet Ratings rates Telefonica as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income. Highlights from the ratings report include:
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.6%. Since the same quarter one year prior, revenues slightly dropped by 0.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- TELEFONICA SA's earnings per share declined by 12.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, TELEFONICA SA reported lower earnings of $1.14 versus $1.57 in the prior year. This year, the market expects an improvement in earnings ($1.38 versus $1.14).
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. In comparison to the other companies in the Diversified Telecommunication Services industry and the overall market, TELEFONICA SA's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- The gross profit margin for TELEFONICA SA is currently lower than what is desirable, coming in at 32.23%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 7.70% trails that of the industry average.
- You can view the full Telefonica Ratings Report.
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