Telefónica TEF.MC
Telefónica is an integrated telecommunications operator offering fixed and mobile telephony, broadband, and pay-TV services in Spain, Brazil, Latin America, and the UK, with a business model based on operating its own networks and attracting residential and corporate customers. Telefónica presents a fragile financial health (Net Debt/EBITDA of 5.27) and a negative ROE (-10.34%), although its valuation is attractive (FCF yield of 20.08%) and it offers a net dividend of 4.35%, but with an unsustainable payout of 111.11%.
Detailed metrics
Market and fundamental data as of the analysis date.
Full AI report
Generated automatically from the metrics, the macro context and the company's news.
Telefónica is an integrated telecommunications operator offering fixed and mobile telephony, broadband, and pay-TV services in Spain, Brazil, Latin America, and the UK, with a business model based on operating its own networks and attracting residential and corporate customers. Telefónica presents a fragile financial health (Net Debt/EBITDA of 5.27) and a negative ROE (-10.34%), although its valuation is attractive (FCF yield of 20.08%) and it offers a net dividend of 4.35%, but with an unsustainable payout of 111.11%.
Score by category
| Category | Score |
|---|---|
| Financial health | 4.9 |
| Quality / Moat | 4.4 |
| Valuation | 4.7 |
| Dividend | 5.0 |
| Momentum | 3.3 |
| Risk & Context | 7.6 |
OVERALL SCORE: 5.2/10
Context and risks
The rise in 10-year Treasury yields (5.17%) and the expectation of further ECB rate hikes increase the cost of Telefónica's debt (Net Debt/EBITDA of 5.27) and pressure the present value of its long-term cash flows. The euro's weakness against the dollar (DXY 101.09) adds additional pressure on dollar-denominated financing costs.
News considered in the analysis
- Telefónica (BME:TEF) Is Back In The Spotlight, What Is Driving Attention? — Artículo especulativo de Simply Wall St. sin información nueva concreta sobre la compañía; no aporta datos materiales.
- I’m a female founder with a liberal arts degree and my company has raised $280 million. You don’t need a PhD to build a robotics startup — Noticia de perfil personal sobre una fundadora de robótica; sin relación con Telefónica.
- European Stocks Close Lower in Tuesday Trading; Energy, Defense Stocks Rise as Oil, Bond Yields Rise — Cobertura general de mercado; menciona sectores (energía, defensa) sin impacto directo en telecomunicaciones.
- European Stocks Close Mixed in Monday Trading; ECB Rates Could Rise as Energy Costs Fuel Inflation — La expectativa de subidas de tipos del BCE, aunque ya descontada en parte, presiona la valoración de los flujos a largo plazo de Telefónica, una empresa de duración larga.
- TELFY or CHT: Which Is the Better Value Stock Right Now? — Comparativa genérica de valor sin información específica o nueva sobre Telefónica.
Verdict: Hold; high debt and a rising rate environment limit upside potential, but cheap valuation and dividend offer some support.
Main risk: High leverage (Net Debt/EBITDA of 5.27) combined with rising interest rates and a weak euro increase financing costs and pressure cash generation.
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