Rating Change #2

TELUS Corp ( TU) has been upgraded by TheStreet Ratings from hold to buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, notable return on equity, compelling growth in net income and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:
  • TU's revenue growth has slightly outpaced the industry average of 4.0%. Since the same quarter one year prior, revenues slightly increased by 6.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Diversified Telecommunication Services industry and the overall market, TELUS CORP's return on equity exceeds that of both the industry average and the S&P 500.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Diversified Telecommunication Services industry average. The net income increased by 32.1% when compared to the same quarter one year prior, rising from $246.00 million to $325.00 million.
  • TELUS CORP has improved earnings per share by 31.6% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, TELUS CORP increased its bottom line by earning $3.22 versus $3.14 in the prior year.

TELUS Corporation provides telecommunications products and services primarily in Canada. The company operates through two segments, Wireless and Wireline. The Wireless segment provides digital personal communications, equipment sales, and wireless Internet services. The company has a P/E ratio of 14.9, above the average telecommunications industry P/E ratio of 13.6 and below the S&P 500 P/E ratio of 17.7. TELUS has a market cap of $7.69 billion and is part of the technology sector and telecommunications industry. Shares are up 18.2% year to date as of the close of trading on Tuesday.

You can view the full TELUS Ratings Report or get investment ideas from our investment research center.

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