Intrinsic value of TELUS - TU

Previous Close

$36.13

  Intrinsic Value

$13.10

stock screener

  Rating & Target

str. sell

-64%

  Value-price divergence*

-62%

Previous close

$36.13

 
Intrinsic value

$13.10

 
Up/down potential

-64%

 
Rating

str. sell

 
Value-price divergence*

-62%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of TU stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 21.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.37
  4.60
  4.64
  4.68
  4.71
  4.74
  4.76
  4.79
  4.81
  4.83
  4.85
  4.86
  4.87
  4.89
  4.90
  4.91
  4.92
  4.93
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.96
  4.97
  4.97
  4.97
  4.98
  4.98
  4.98
Revenue, $m
  9,418
  9,851
  10,308
  10,790
  11,298
  11,834
  12,397
  12,991
  13,616
  14,273
  14,964
  15,692
  16,457
  17,261
  18,106
  18,995
  19,929
  20,911
  21,943
  23,027
  24,165
  25,362
  26,619
  27,939
  29,327
  30,783
  32,314
  33,921
  35,609
  37,382
  39,244
Variable operating expenses, $m
 
  8,341
  8,715
  9,109
  9,525
  9,963
  10,424
  10,910
  11,421
  11,959
  12,525
  12,840
  13,466
  14,124
  14,815
  15,543
  16,307
  17,110
  17,954
  18,841
  19,773
  20,752
  21,781
  22,861
  23,996
  25,188
  26,440
  27,756
  29,137
  30,588
  32,111
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  8,155
  8,341
  8,715
  9,109
  9,525
  9,963
  10,424
  10,910
  11,421
  11,959
  12,525
  12,840
  13,466
  14,124
  14,815
  15,543
  16,307
  17,110
  17,954
  18,841
  19,773
  20,752
  21,781
  22,861
  23,996
  25,188
  26,440
  27,756
  29,137
  30,588
  32,111
Operating income, $m
  1,263
  1,510
  1,593
  1,681
  1,773
  1,871
  1,973
  2,081
  2,195
  2,314
  2,440
  2,852
  2,991
  3,137
  3,291
  3,453
  3,622
  3,801
  3,988
  4,185
  4,392
  4,610
  4,838
  5,078
  5,330
  5,595
  5,873
  6,166
  6,472
  6,795
  7,133
EBITDA, $m
  2,778
  3,132
  3,277
  3,430
  3,592
  3,762
  3,941
  4,130
  4,329
  4,538
  4,757
  4,989
  5,232
  5,488
  5,756
  6,039
  6,336
  6,648
  6,976
  7,321
  7,683
  8,063
  8,463
  8,882
  9,323
  9,787
  10,273
  10,784
  11,321
  11,884
  12,476
Interest expense (income), $m
  377
  373
  400
  427
  457
  488
  520
  555
  591
  629
  669
  711
  756
  802
  851
  903
  957
  1,014
  1,074
  1,137
  1,203
  1,272
  1,345
  1,422
  1,502
  1,587
  1,675
  1,769
  1,867
  1,969
  2,077
Earnings before tax, $m
  1,230
  1,137
  1,194
  1,254
  1,316
  1,383
  1,453
  1,526
  1,604
  1,685
  1,771
  2,141
  2,236
  2,335
  2,440
  2,550
  2,666
  2,787
  2,915
  3,049
  3,190
  3,338
  3,493
  3,657
  3,828
  4,009
  4,198
  4,397
  4,606
  4,825
  5,056
Tax expense, $m
  315
  307
  322
  338
  355
  373
  392
  412
  433
  455
  478
  578
  604
  631
  659
  688
  720
  752
  787
  823
  861
  901
  943
  987
  1,034
  1,082
  1,133
  1,187
  1,244
  1,303
  1,365
Net income, $m
  905
  830
  871
  915
  961
  1,009
  1,060
  1,114
  1,171
  1,230
  1,293
  1,563
  1,632
  1,705
  1,781
  1,861
  1,946
  2,035
  2,128
  2,226
  2,329
  2,437
  2,550
  2,669
  2,795
  2,926
  3,065
  3,210
  3,362
  3,522
  3,691

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  320
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  20,524
  21,140
  22,121
  23,155
  24,245
  25,394
  26,604
  27,877
  29,218
  30,629
  32,113
  33,673
  35,315
  37,041
  38,855
  40,762
  42,767
  44,873
  47,087
  49,413
  51,857
  54,425
  57,122
  59,956
  62,932
  66,059
  69,343
  72,792
  76,415
  80,220
  84,215
Adjusted assets (=assets-cash), $m
  20,204
  21,140
  22,121
  23,155
  24,245
  25,394
  26,604
  27,877
  29,218
  30,629
  32,113
  33,673
  35,315
  37,041
  38,855
  40,762
  42,767
  44,873
  47,087
  49,413
  51,857
  54,425
  57,122
  59,956
  62,932
  66,059
  69,343
  72,792
  76,415
  80,220
  84,215
Revenue / Adjusted assets
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
Average production assets, $m
  15,006
  15,693
  16,421
  17,189
  17,998
  18,851
  19,749
  20,695
  21,690
  22,737
  23,838
  24,997
  26,216
  27,497
  28,844
  30,259
  31,747
  33,311
  34,955
  36,681
  38,496
  40,402
  42,404
  44,508
  46,717
  49,038
  51,476
  54,036
  56,726
  59,550
  62,516
Working capital, $m
  -1,833
  -1,143
  -1,196
  -1,252
  -1,311
  -1,373
  -1,438
  -1,507
  -1,579
  -1,656
  -1,736
  -1,820
  -1,909
  -2,002
  -2,100
  -2,203
  -2,312
  -2,426
  -2,545
  -2,671
  -2,803
  -2,942
  -3,088
  -3,241
  -3,402
  -3,571
  -3,748
  -3,935
  -4,131
  -4,336
  -4,552
Total debt, $m
  9,645
  9,990
  10,687
  11,421
  12,195
  13,011
  13,870
  14,774
  15,726
  16,727
  17,781
  18,889
  20,055
  21,280
  22,568
  23,922
  25,345
  26,841
  28,413
  30,064
  31,800
  33,623
  35,538
  37,550
  39,663
  41,883
  44,215
  46,663
  49,236
  51,937
  54,774
Total liabilities, $m
  14,664
  15,009
  15,706
  16,440
  17,214
  18,030
  18,889
  19,793
  20,745
  21,746
  22,800
  23,908
  25,074
  26,299
  27,587
  28,941
  30,364
  31,860
  33,432
  35,083
  36,819
  38,642
  40,557
  42,569
  44,682
  46,902
  49,234
  51,682
  54,255
  56,956
  59,793
Total equity, $m
  5,860
  6,131
  6,415
  6,715
  7,031
  7,364
  7,715
  8,084
  8,473
  8,882
  9,313
  9,765
  10,241
  10,742
  11,268
  11,821
  12,402
  13,013
  13,655
  14,330
  15,039
  15,783
  16,565
  17,387
  18,250
  19,157
  20,109
  21,110
  22,160
  23,264
  24,422
Total liabilities and equity, $m
  20,524
  21,140
  22,121
  23,155
  24,245
  25,394
  26,604
  27,877
  29,218
  30,628
  32,113
  33,673
  35,315
  37,041
  38,855
  40,762
  42,766
  44,873
  47,087
  49,413
  51,858
  54,425
  57,122
  59,956
  62,932
  66,059
  69,343
  72,792
  76,415
  80,220
  84,215
Debt-to-equity ratio
  1.646
  1.630
  1.670
  1.700
  1.730
  1.770
  1.800
  1.830
  1.860
  1.880
  1.910
  1.930
  1.960
  1.980
  2.000
  2.020
  2.040
  2.060
  2.080
  2.100
  2.110
  2.130
  2.150
  2.160
  2.170
  2.190
  2.200
  2.210
  2.220
  2.230
  2.240
Adjusted equity ratio
  0.278
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  905
  830
  871
  915
  961
  1,009
  1,060
  1,114
  1,171
  1,230
  1,293
  1,563
  1,632
  1,705
  1,781
  1,861
  1,946
  2,035
  2,128
  2,226
  2,329
  2,437
  2,550
  2,669
  2,795
  2,926
  3,065
  3,210
  3,362
  3,522
  3,691
Depreciation, amort., depletion, $m
  1,515
  1,622
  1,684
  1,749
  1,819
  1,891
  1,968
  2,049
  2,134
  2,224
  2,318
  2,137
  2,241
  2,350
  2,465
  2,586
  2,713
  2,847
  2,988
  3,135
  3,290
  3,453
  3,624
  3,804
  3,993
  4,191
  4,400
  4,618
  4,848
  5,090
  5,343
Funds from operations, $m
  2,425
  2,452
  2,555
  2,665
  2,780
  2,901
  3,029
  3,163
  3,305
  3,454
  3,610
  3,699
  3,873
  4,055
  4,246
  4,448
  4,659
  4,882
  5,115
  5,361
  5,619
  5,890
  6,174
  6,474
  6,788
  7,118
  7,464
  7,828
  8,211
  8,612
  9,034
Change in working capital, $m
  42
  -50
  -53
  -56
  -59
  -62
  -65
  -69
  -72
  -76
  -80
  -84
  -89
  -93
  -98
  -103
  -108
  -114
  -120
  -126
  -132
  -139
  -146
  -153
  -161
  -169
  -178
  -186
  -196
  -206
  -216
Cash from operations, $m
  2,383
  2,502
  2,608
  2,720
  2,839
  2,963
  3,094
  3,232
  3,377
  3,530
  3,691
  3,784
  3,961
  4,148
  4,344
  4,551
  4,768
  4,996
  5,235
  5,487
  5,751
  6,029
  6,320
  6,627
  6,949
  7,287
  7,642
  8,015
  8,406
  8,818
  9,250
Maintenance CAPEX, $m
  0
  -1,283
  -1,341
  -1,404
  -1,469
  -1,538
  -1,611
  -1,688
  -1,769
  -1,854
  -1,943
  -2,037
  -2,137
  -2,241
  -2,350
  -2,465
  -2,586
  -2,713
  -2,847
  -2,988
  -3,135
  -3,290
  -3,453
  -3,624
  -3,804
  -3,993
  -4,191
  -4,400
  -4,618
  -4,848
  -5,090
New CAPEX, $m
  -2,318
  -687
  -728
  -768
  -809
  -853
  -898
  -945
  -995
  -1,047
  -1,102
  -1,159
  -1,218
  -1,281
  -1,347
  -1,416
  -1,488
  -1,564
  -1,643
  -1,727
  -1,814
  -1,906
  -2,002
  -2,103
  -2,210
  -2,321
  -2,438
  -2,560
  -2,689
  -2,824
  -2,966
Cash from investing activities, $m
  -2,163
  -1,970
  -2,069
  -2,172
  -2,278
  -2,391
  -2,509
  -2,633
  -2,764
  -2,901
  -3,045
  -3,196
  -3,355
  -3,522
  -3,697
  -3,881
  -4,074
  -4,277
  -4,490
  -4,715
  -4,949
  -5,196
  -5,455
  -5,727
  -6,014
  -6,314
  -6,629
  -6,960
  -7,307
  -7,672
  -8,056
Free cash flow, $m
  220
  532
  539
  549
  560
  572
  585
  599
  613
  629
  646
  588
  606
  626
  647
  670
  693
  718
  745
  772
  801
  832
  865
  899
  935
  973
  1,013
  1,055
  1,099
  1,145
  1,194
Issuance/(repayment) of debt, $m
  654
  665
  696
  734
  774
  816
  859
  904
  952
  1,002
  1,054
  1,108
  1,165
  1,225
  1,288
  1,354
  1,423
  1,496
  1,572
  1,652
  1,735
  1,823
  1,915
  2,012
  2,113
  2,220
  2,332
  2,449
  2,572
  2,701
  2,837
Issuance/(repurchase) of shares, $m
  -132
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  728
  665
  696
  734
  774
  816
  859
  904
  952
  1,002
  1,054
  1,108
  1,165
  1,225
  1,288
  1,354
  1,423
  1,496
  1,572
  1,652
  1,735
  1,823
  1,915
  2,012
  2,113
  2,220
  2,332
  2,449
  2,572
  2,701
  2,837
Total cash flow (excl. dividends), $m
  947
  1,198
  1,235
  1,283
  1,334
  1,388
  1,444
  1,503
  1,565
  1,630
  1,699
  1,696
  1,772
  1,852
  1,936
  2,024
  2,117
  2,214
  2,316
  2,424
  2,537
  2,655
  2,780
  2,911
  3,048
  3,193
  3,344
  3,504
  3,671
  3,846
  4,031
Retained Cash Flow (-), $m
  -182
  -271
  -284
  -300
  -316
  -333
  -351
  -369
  -389
  -409
  -430
  -453
  -476
  -500
  -526
  -553
  -581
  -611
  -642
  -675
  -709
  -745
  -782
  -822
  -863
  -907
  -952
  -1,000
  -1,051
  -1,103
  -1,159
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  927
  951
  983
  1,018
  1,054
  1,093
  1,134
  1,176
  1,221
  1,269
  1,243
  1,296
  1,351
  1,409
  1,471
  1,535
  1,603
  1,674
  1,749
  1,828
  1,911
  1,998
  2,089
  2,185
  2,286
  2,392
  2,503
  2,620
  2,743
  2,872
Discount rate, %
 
  8.40
  8.82
  9.26
  9.72
  10.21
  10.72
  11.26
  11.82
  12.41
  13.03
  13.68
  14.37
  15.09
  15.84
  16.63
  17.46
  18.34
  19.25
  20.22
  21.23
  22.29
  23.40
  24.57
  25.80
  27.09
  28.45
  29.87
  31.36
  32.93
  34.58
PV of cash for distribution, $m
 
  855
  803
  754
  702
  649
  593
  537
  481
  426
  373
  303
  259
  218
  180
  146
  117
  92
  70
  53
  39
  28
  20
  13
  9
  6
  4
  2
  1
  1
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

TELUS Corporation (TELUS) is a telecommunications company. The Company provides a range of telecommunications services and products, including wireless and wireline voice and data. Its data services include Internet protocol (IP), television (TV), hosting, managed information technology and cloud-based services, and certain healthcare solutions. The Company operates through two business segments: Wireless segment and Wireline segment. Its wireless and wireline businesses are primarily operated through TELUS Communications Company (TCC). The Company offers business services, including healthcare, across wireless and wireline are supported through TELUS sales representatives, product specialists, independent dealers and online self-serve applications for small and medium-sized businesses (SMBs). Its business process outsourcing services are supported through sales representatives and client relationship management teams.

FINANCIAL RATIOS  of  TELUS (TU)

Valuation Ratios
P/E Ratio 23.6
Price to Sales 2.3
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 8.9
Price to Free Cash Flow 327.9
Growth Rates
Sales Growth Rate 2.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -32.3%
Cap. Spend. - 3 Yr. Gr. Rate 7.5%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 146.6%
Total Debt to Equity 164.6%
Interest Coverage 4
Management Effectiveness
Return On Assets 5.9%
Ret/ On Assets - 3 Yr. Avg. 6.9%
Return On Total Capital 6%
Ret/ On T. Cap. - 3 Yr. Avg. 7.4%
Return On Equity 15.7%
Return On Equity - 3 Yr. Avg. 17.5%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 55.8%
Gross Margin - 3 Yr. Avg. 55.6%
EBITDA Margin 33.1%
EBITDA Margin - 3 Yr. Avg. 34.2%
Operating Margin 13.4%
Oper. Margin - 3 Yr. Avg. 16.6%
Pre-Tax Margin 13.1%
Pre-Tax Margin - 3 Yr. Avg. 14.9%
Net Profit Margin 9.6%
Net Profit Margin - 3 Yr. Avg. 10.9%
Effective Tax Rate 25.6%
Eff/ Tax Rate - 3 Yr. Avg. 26.4%
Payout Ratio 87.5%

TU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TU stock intrinsic value calculation we used $9418 million for the last fiscal year's total revenue generated by TELUS. The default revenue input number comes from 2016 income statement of TELUS. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our TU stock valuation model: a) initial revenue growth rate of 4.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 8.4%, whose default value for TU is calculated based on our internal credit rating of TELUS, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of TELUS.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of TU stock the variable cost ratio is equal to 84.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TU stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 4% for TELUS.

Corporate tax rate of 27% is the nominal tax rate for TELUS. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the TU stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for TU are equal to 159.3%.

Life of production assets of 11.7 years is the average useful life of capital assets used in TELUS operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for TU is equal to -11.6%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $5860 million for TELUS - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 590.54 million for TELUS is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of TELUS at the current share price and the inputted number of shares is $21.3 billion.

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COMPANY NEWS

▶ Is It Time To Sell TELUS Corporation (TSX:T)?   [01:08PM  Simply Wall St.]
▶ YouTube now available on Optik TV   [Oct-02-17 12:00PM  Marketwired]
▶ TELUS Corp. Value Analysis (NYSE:TU) : September 26, 2017   [Sep-26-17 11:27AM  Capital Cube]
▶ ETFs with exposure to TELUS Corp. : August 25, 2017   [Aug-25-17 05:49PM  Capital Cube]
▶ TELUS International Acquires Voxpro   [Aug-16-17 11:15AM  CNW Group]
▶ Top Ranked Income Stocks to Buy for August 15th   [Aug-15-17 10:41AM  Zacks]
▶ Stock Market News For August 14, 2017   [Aug-14-17 10:05AM  Zacks]
▶ Telus misses Street 2Q forecasts   [Aug-11-17 10:15PM  Associated Press]
▶ Should You Sell TELUS (TU) Before Earnings?   [Aug-10-17 09:00AM  Zacks]
▶ ETFs with exposure to TELUS Corp. : June 8, 2017   [Jun-08-17 01:58PM  Capital Cube]
▶ TELUS named to CRN's 2017 Solution Provider 500 list   [Jun-07-17 09:00AM  Marketwired]
▶ TELUS International Launches Omnichannel Solution   [Jun-06-17 09:00AM  PR Newswire]
▶ ETFs with exposure to TELUS Corp. : May 23, 2017   [May-23-17 01:10PM  Capital Cube]
▶ Stock Market News for May 12, 2017   [May-12-17 10:00AM  Zacks]
▶ TELUS announces election of directors   [May-11-17 05:06PM  Marketwired]
▶ TELUS closes US and Canadian debt offerings   [Mar-06-17 11:00AM  Marketwired]
Financial statements of TU
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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