Telefonica SA (TELFY) vs Telefonica Brasil S.A. (VIV)

Telefonica SA and Telefonica Brasil S.A. are both Telecom Services companies. Telefonica SA is the larger, with a market value of $21.5B against $18.7B — 1.1× the size. Telefonica SA has negative trailing earnings, so its P/E is not meaningful; Telefonica Brasil S.A. trades at 23.3×. Telefonica Brasil S.A. grew revenue faster over the last twelve months: 16.4% against −6.91%. Telefonica Brasil S.A. has the higher net margin (10.6% vs −10.6%) and the higher return on invested capital (8.17% vs 1.78%). Both pay a dividend; Telefonica SA yields more (8.46% vs 5.77%). Across the 22 metrics below, Telefonica Brasil S.A. leads on 15 and Telefonica SA on 7.

Valuation

Metric TELFY VIV Telecom Services median
P/E n/m 23.26 13.27
P/S 0.55 3.17 0.95
P/B 1.02 2.85 1.47
Price to free cash flow 12.19 16.61 8.72
EV/EBITDA 35.36 7.99 6.85
EV/Sales 1.34 3.36 1.87
Earnings yield (18.86%) 4.30% 1.66%
Free cash flow yield 8.20% 6.02% 5.53%

Profitability

Metric TELFY VIV Telecom Services median
Gross margin 66.84% 45.03% 51.26%
Operating margin 3.78% 17.00% 7.62%
Net margin (10.56%) 10.59% 4.22%
Free cash flow margin 4.54% 19.09% 4.73%
Return on equity (17.31%) 9.89% 5.80%
Return on assets (3.95%) 5.17% 0.00%
Return on invested capital 1.78% 8.17% 3.41%

Growth

Metric TELFY VIV Telecom Services median
Revenue growth (TTM) (6.91%) 16.40% 3.31%
EPS growth (last fiscal year) (1,433.33%) (45.52%) —
Revenue growth, 5-year CAGR (4.19%) 4.99% 1.50%
Net income growth, 5-year CAGR 0.00% 3.60% 0.00%

Health

Metric TELFY VIV Telecom Services median
Debt to equity 1.84 0.30 0.63
Current ratio 0.92 0.95 1.13
Net debt to EBITDA 20.40 0.53 1.86

Dividend

Metric TELFY VIV Telecom Services median
Dividend yield 8.46% 5.77% 4.06%
Payout ratio 1.15 0.83 0.00

Size

Metric TELFY VIV Telecom Services median
Market cap 21.48b 18.68b 3.06b

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