Orange (ORA:EUR10.74) offers 9th highest dividend yield 03 July 2020

NEWS BITES - EUROPE

Dateline: Friday July 03, 2020

Orange (FR:ORA), France's largest Fixed line telecommunications company by market cap, is currently the 9th highest dividend yielding stock in the CAC 40 Index . The dividend yield of 4.66% is 66.57 times the triple-A bond yield of 0.07%. The final dividend for FY 2019 was 20.0c. Dividend for FY 2019 was down 50.0% from 40.0c in the previous year FY 2018.

Bullish Turning Point

Price/Earnings of 10.7 close to historical low

The P/E of 10.7 is 0.3 times the highest average P/E of 37.4 in the last five years. This is a value criterion, according to Benjamin Graham who described as a value criterion "A P/E ratio down to less than four-tenth of the highest average P/E ratio the stock attained in the most recent five years".

Stock Summary (traded in EUR)

Currency1 EUR = 1.12 USD Dividend Yield4.7%
Jul 03 closeEUR10.74SectorFixed Line Telecommunications
Ave Daily Volume8,552,407 sharesShares Outstanding2,660,056,599
52-Week Range8.68 - 15.10Market CapEUR28.6 billion [USD32.1 billion]
P/E10.7

ADR Summary (traded in USD)

Home ExchangeFranceRatio1 ADR equals 1 ordinary share
CodeORANTypeSponsored
ISINUS6840601065Jul 02 closeUSD12.04
CUSIP684060106Ave Daily Volume691,645 ADRs
*No. Held by Institutions26,394,88152-Week Range9.76 - 16.04
% of shares outstanding1%

Primary Exchange and Other Listings: Trading Currency and Volume (Excl ADR)

ExchangeTickerCurrencyLastADVTVol % of TotalToday's VI
ParisORAEUR10.748,552,40499.00.5
XetraFTEEUR10.8348,6660.90.8
Total100.00

ADVT= Avg. Daily Volume of Trading; VI= Volume Index (1 is avg)

Click on links to download ORA data

News Archives Past 4 years in HTML

Patents past quarter in xls

INDEX

SECTION 1 News In The Past Two Months

SECTION 2 Corporate Profile and Independent Ratings

SECTION 3 Today's Bullish Signals

SECTION 4 Ongoing Bullish Parameters

SECTION 5 Today's Bearish Signals

SECTION 6 Ongoing Bearish Parameters

Click here to view the following

SECTION 7 Patents

SECTION 8 Dividend

SECTION 9 Peer Group Analysis & Ranking

SECTION 10 News Archives (Jul 2018 - Dec 2019)

Glossary

SECTION 1 News In The Past Two Months

1.1 Dividends

May 14: Orange announces dividend

Orange today announced a final dividend of 20.0c per share. The ex-dividend date is Tuesday, June 02, 2020 and the record date is Wednesday, June 03, 2020 and it is payable on Thursday, June 04.

SECTION 2 Corporate Profile and Independent Ratings

2.1 Activities

Orange is the French leader of telecommunications company. Net sales break down by activity as follows: - telecommunication services for individuals (84.5%): mobile telephone services (81.6% of sales; 132.6 million clients in 2009; Orange name in France, the United Kingdom and Caribbean, FTP Espana in Spain and PTK Centertel in Poland), fixed telephone services and Internet access (15.5%). The remaining sales (2.9%) concerns services intended for telecommunication operators; - telecommunication services to businesses (15.5%): fixed telephone services (41.9% of sales), network services (28.7%), integration and information management for communication applications (18.1%), and other (11.3%). Net sales break down geographically as follows: France (44%), the United Kingdom (9.5%), Spain (7.2%), Poland (7.1%), Europe (16.7%) and other (15.5%).

2.2 Contact Details

Websitehttp://www.orange.com
Physical Address78 rue Olivier de Serres 75505 Paris Cedex 15 France
Phone+33 (0)1 44 44 22 22
Fax+33 (0)2 32 94 91 20

2.3 Independent Ratings

+ Carbon Disclosure Project (CDP):

Orange is one of 181 companies selected by the Carbon Disclosure Project (CDP) in their A List 2019. The CDP names the world's most pioneering companies leading on environmental transparency and performance.

+ Fortune 500:

It was ranked 210 by total revenues in the Fortune 500 annual list for 2017; a deterioration over a year from rank 204 in 2016.

+ Newsweek 500:

It was ranked 124 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 9.2% in Carbon productivity, 8.1% in Waste productivity and 6.2% in Energy productivity.

+ Industryweek 1000:

It is a new entrant in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2016, ranked 79.

+ Top 50 BCG:

It is a new entrant in Boston Consulting Group's list of Top 50 Most Innovative Companies 2016, ranked 44

+ FT 500:

It is the 110th largest by revenue in the FT Global 500.

+ Forbes 2000:

It is the 169th largest by revenue in the Forbes Global 2000.

SECTION 3 Today's Bullish Signals

3.1 Momentum Up 4.2% Past Week

Orange outperformed the CAC 40 index in 3 out of 5 days. The price ranged between a low of 10.39 on Friday, Jun 26 and a high of 10.83 on Thursday, Jul 02.

DayOrangeClose price [EUR]Price change %Relative change %Comment
ThursdayAdds EUR612 million (US$689 million) in MCap, top heavyweight rise in Fixed line telecommunications sector10.832.2-0.3Week-high of 10.83
WednesdayOffers 9th highest dividend yield10.6-0.51.2Steepest Fall
TuesdayDecreases 3% in Q2/202010.65-0.4-0.2Price/MAP200 below 1 and falling
MondayShares post best month in seven months10.692.92.5Top Rise
FridayOffers 10th highest dividend yield10.3900.2Week-low of 10.39

3.2 Rank in the top 20% by Relative Valuation in the French market

DescriptionValueRank
Earnings Yield %9.3In Top 19%
Cash to MCap %16.9In Top 20%

3.3 Undervaluation

Price/Earnings:

Orange stock is trading at the ninth lowest P/E multiple in the CAC 40 Index.

Earnings Yield of 9.3% > French ave of 5.3% > Bond Yield of 0.1%:

- Earnings yield of 9.3% is greater than the French average earning yield of 5.3%.

- The earnings yield of 9.3% is 139.0 times the 10-year bond yield of 0.1%.

(All figures in %)

Earnings Yield9.3
French avg5.3
Dividend Yield4.7
Bond Yield0.1

Dividend Yield:

Orange stock is the ninth highest dividend yielding stock in the CAC 40 Index.

Dividend Yield > Bond Yield of 0.07%:

The dividend yield of 4.66% is 66.57 times the triple-A bond yield of 0.07%. The times factor of 66.57 is above the benchmark factor of 0.67 times set by Benjamin Graham.

(All figures in %)

Dividend Yield4.66
Bond Yield0.07
Spread4.59

Dividend Yield of 4.7% > Index avg of 2.7%:

- The relative yield of the stock, defined by its yield of 4.7%, divided by average yield of dividend yielding stocks in the CAC 40 Index of 2.7% is 172.6%. This suggests the stock is undervalued in dividend yield terms.

MCap/Total Assets:

- Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.3. Compared with the rest of the market the stock is undervalued and ranks in the top quartile of stocks by value of Q Ratio.

- The company is cash rich with Cash to Market Capitalisation at 16.9%.

Brand Value/Enterprise Value:

- Brandirectory have estimated Orange brand value at EUR14.6 billion (US$16.3 billion). The Brand Value represents an impressive 18.4% of the estimated Enterprise Value of EUR79.1 billion (US$88.8 billion). Enterprise Value is defined as MCap of EUR28.6 billion plus net debt of EUR50.5 billion.

3.4 Other Bullish Signals

- As per the Du Pont analysis, Return on Equity of 10.2% is better than sector average of 9.5%. This is computed as net profit margin of 7.6% times asset turnover [sales/assets] of 0.4 times leverage factor [total assets/shareholders' equity] of 3.4.

SECTION 4 Ongoing Bullish Parameters

4.1 Rank in the top 5% by Size in the French market

DescriptionValueRank
Ave daily TurnoverEUR47.1 million (US$52.9 million)In Top 3%
Annual RevenueEUR42.2 billion (US$47.4 billion)In Top 4%
MCapUSD32.1 billionIn Top 5%

4.2 Rank in the top 13% by Performance in the French market

DescriptionValueRank
EBITDA Margin %30.8In Top 13%

4.3 Present Value of EUR1000 Invested in the Past [3 Mo, 3 Yrs]; The Best Periods with PVEUR1000 > 1,012

PVEUR1,0003 mo ago3 yrs ago
ORA.FREUR1,014EUR1,013
Fixed Line Telecommunications sectorEUR1,019EUR819
CAC 40 IndexEUR1,237EUR964

4.4 Improved EBIT Margins:

EBIT margin is positive and has increased from 7.8% to 11.1% in the past year.

FYEBIT Margins (%)
201911.1
20177.8

4.5 Increased Volume Past five Years

In the past five years, Average Daily Volume of Trading (ADVT) has increased 2.9% to 8.6 million shares.

Avg. Daily Volume Traded 12 months ended Jul 03, million shares

YearADVT
20208.6
20196.6
20186.3
20176.1
20168.3

4.6 Satisfies one criteria of Benjamin Graham

- The P/E of 10.7 is 0.3 times the highest average P/E of 37.4 in the last five years. This is a value criterion, according to Benjamin Graham who described as a value criterion "A P/E ratio down to less than four-tenth of the highest average P/E ratio the stock attained in the most recent five years".

SECTION 5 Today's Bearish Signals

5.1 Momentum Down 4.7% Past Month

In the past quarter the steepest fall of 9.8% took place in the week beginning Monday June 08. The fall was exacerbated by volume of 1.3 times average.

The Worst 3 weeks in the past quarter:

Mon-FriChange %CAC 40 index Change %RPC %Vol Ind [1 is avg]
Jun 08-12-9.8-6.9-2.91.3
May 11-15-5.7-60.30.8
May 04-08-3.7-0.5-3.20.7

5.2 Rank in the bottom 17% by Relative Valuation in the French market

DescriptionValueRank
EV/EBITDA6.1In Bottom 17%

5.3 Downtrend

Beta < 1 combined with price fall. The Beta of the stock is 0.7.

Price/Moving Average Price of 0.88:

- The price to 200-day MAP ratio is 0.88, a bearish indicator. In the past 200 days this ratio has been under 0.88, 73 times suggesting further downside. The 50-day MAP of EUR10.59 is lower than the 200-day MAP of EUR12.26, a bearish indicator. The 200-day MAP has decreased to EUR12.26. A decrease is another bearish indicator.

Trailing Relative Strength (6 months) at 43 percentile:

- The stock has a 6-month relative strength of 43 in the French market of 557 stocks which means it has underperformed 57% of the market.

5.4 Overvaluation

Price/Earnings of 10.7 > sector avg of 9.5:

- Price/Earnings of 10.7 versus sector average of 9.5.

5.5 Other Bearish Signals

- Total Liabilities/EBITDA of 5.7 is more than or equal to 5, this compares unfavourably with the Joseph Piotroski benchmark of 5.

SECTION 6 Ongoing Bearish Parameters

6.1 Rank in the bottom 17% by Gearing in the French market

DescriptionValueRank
Total Debt to Equity1.5In Bottom 17%

6.2 Annualised Period-based Total Shareholder Returns [TSR %]: The Worst Periods with TSR < 3%

TSR %1 yr5 yrs10 yrs
ORA.FR-16.22.92.1

6.3 Present Value of EUR1000 Invested in the Past Year; The Worst Period with PVEUR1000 < 839

PVEUR1,0001 yr ago
ORA.FREUR838
Fixed Line Telecommunications sectorEUR829
CAC 40 IndexEUR891

6.4 The Worst Periods [3 Mo, 1 Yr, 3 Yrs] with Price Change % < -0.4

3-Year price change of -11.8% for Orange underperformed the change of -2.2% in the CAC 40 index for a relative price change of -9.6%.

Price Change %QuarterYear3 Years
Orange-0.5-19.4-11.8
Fixed Line Telecommunications sector1.9-17.1-17.2
CAC 40 index20.5-10.2-2.2

6.5 Moving Annual Return of -15.6% in the past year:

Moving Annual Return was -15.6% in the past year. Based on a dynamic start date of 5 years ago, the real rate of return has averaged 3.6%

ORAClose (EUR)Dividends (EUR)Capital Gain / (Loss) %% YieldAnnual Return %
Jul 0310.740.5(19.4)3.8(15.6)
1 Yr ago13.320.725.47.4
2 Yrs ago13.060.657.25.312.6
3 Yrs ago12.180.6(3.4)4.81.4
4 Yrs ago12.60.67.35.112.4

Close 5 years ago EUR11.74

6.6 MCap: 5-Year Decrease of EUR9 billion [USD10 billion]

In the past 5 years Market Capitalization has decreased by EUR8.9 billion (24%) from EUR37.5 billion to EUR28.6 billion. Based on a dynamic start date of 5 years ago, there have been declines in MCap in 3 out of 5 years.

PriceMCap (EUR B)MCap (US$ B)
LastEUR10.7428.632.1
1 Year agoEUR13.3236.841.6
2 Years agoEUR13.0637.944.2
3 Years agoEUR12.1836.942.2
4 Years agoEUR12.6038.843.2
5 Years agoEUR11.7437.541.6

6.7 High Debt to Equity (%) and Increasing

The debt to equity ratio of 150.8% is above a safe benchmark figure of 70%. Moreover, it has deteriorated in the past two years.

YearsDebt to Equity (%)
Dec 2019150.79
Dec 2017122.23
Dec 201614.22
Dec 2014116.29

6.8 Declining VWAP

In the past five years Volume Weighted Average Price (VWAP) has decreased by 2.9% to EUR12.17. Based on a dynamic start date of five years ago, there have been declines in VWAP in 3 out of 5 years.

Past five years, 12 months ended Jul 03 (EUR)

YearHigh PriceVWAPLow Price
202015.112.178.68
201913.9713.0612.28
201813.6212.6711.83
201713.8512.4211.26
201614.0812.5310.12

6.9 Declining share turnover

In the past five years, average daily share turnover has decreased 3.8% to EUR102.7 million (US$115.3 million). This suggests decreased liquidity.

Past five years, 12 months ended Jul 03 (EUR million)

YearAverage Daily Turnover
2020102.7
201987.7
201880.7
201778.0
2016106.7

6.10 Satisfies 3 out of 9 criteria of Joseph Piotroski [pass mark 5]:

- Positive net income.

- Positive operating cashflow.

- Good quality of earnings [operating cashflow exceeds net income].

6.11 Year-over-year (%) Change in Dividend:

Final dividend for FY 2019 was 20.0c. The year-on-year change was down 50.0% from 40.0c in the previous year FY 2018.

FinalFY 2018FY 2019
Dividend (EUR Cents)40.020.0

Glossary

ADVT: Average Daily Volume of shares Traded

Annual Return: Dividends Paid In a 12-Month Period/Price at the Beginning of the Period + Capital Gain or Loss over 1 Year/Price 1 Year Ago (%)

Cash/MCap: Cash plus Liquids/Market Capitalisation (times)

Debt/Equity: Net Debt/Net Assets %

Dividend Yield: Dividend Per Share/Share Price (%)

EBIT Margin : Earnings Before Interest and Tax/Revenue (%)

Earnings Yield: Earnings Per Share/Share Price (%)

Income during the n years (3/2/1): Dividends received during the Period

Moving Average Price (n periods): Sum of Prices for each Period/Number of Periods

PV1000: Present value of 1000 invested 1 year/'n' years ago

Price Close/Moving Avg Price: Latest Price/Moving Average Price

Price/Earnings: Share Price/Earnings Per Share (times)

Price/Sales: Share Price/Sales Per Share (times)

Relative Price Change [RPC]: Relative price change is price change of stock with respect to Benchmark Index

Relative Strength (6 Months): Price close today/Price close 6 months ago, then ranked by percentile within the entire market.

Return on Equity (Shareholders' Funds): Net Profit/Net Assets (%)

TSR: Total Shareholder Returns is expressed as an annualized rate of return for shareholders after allowing for capital appreciation and dividend

Volume Index (VI): Number of shares traded in the period/Average number of shares traded for the period

Volume Weighted Average Price (VWAP): The Volume Weighted Average Price (VWAP) is the summation of turnover divided by total volume in the same period.

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