Deutsche Telekom AG
🇩🇪 DTE.XETRA · Frankfurt · DE0005557508
Telecom
EUR 30.77 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
15.6
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 30.77 ÷ 1.97 = 15.6
TTM period through: 2025-12-31
Forward P/E (estimated): 14.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 15.6
Yield (Fwd)
3.25%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 3.14%
Net Debt/EBITDA (TTM)
2.6x
Latest quarter: 10.6x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2025-12-31
Latest quarter (2025-12-31): 10.6x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
50.7%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 67.0%
Cash Flow Payout (TTM): 15.8%
FCF Coverage (TTM): 4.40x
ROE
15.6%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
5.7x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Deutsche Telekom is a high-quality global telecom leader with exceptionally secure cash flows and a dominant market position. Trading at €30.77, below our monopoly fair value estimate of €35.51, it offers an attractive upside of roughly 13% and is worth considering for new positions. The recent price weakness—driven by broader geopolitical volatility and the ex-dividend effect—offers a compelling entry point, while the minor proposed dividend adjustment is fully offset by a massive €2 billion buyback and stellar free cash flow coverage.
Sector Context
Deutsche Telekom is Europe's dominant telecommunications provider, offering essential infrastructure services including mobile, broadband, and enterprise IT solutions, while deriving significant growth from its majority stake in T-Mobile US. In the capital-intensive telecom sector, its Net Debt/EBITDA of 2.63x is well within safe boundaries and demonstrates successful deleveraging, while its massive cash generation easily supports both infrastructure investments and shareholder returns.
Temporary Opportunity Identified
Broader market selloffs driven by Middle East geopolitical tensions, combined with a technical ex-dividend price drop, have temporarily depressed the stock price despite intact business fundamentals and strong AGM guidance.
📊 Strategy Analysis
- • Trading at €30.77, below the monopoly fair value estimate of €35.51, offering approximately 13% upside.
- • Exceptional dividend safety with a cash flow payout ratio of just 15.8% (FCF coverage of 4.4x), indicating the payout is heavily shielded from earnings volatility.
- • Strong track record of deleveraging, reducing Net Debt/EBITDA to a healthy 2.63x from 3.4x in 2019, demonstrating prudent balance sheet management.
- • Recent price weakness driven by technical ex-dividend effects and broader geopolitical market selloffs creates a temporary buying opportunity for a highly resilient business.
⚠ What to Watch
- • The proposed 11.7% dividend adjustment for 2026 disrupts dividend growth consistency, although it is part of a broader capital return strategy that includes a €2 billion share buyback.
- • Current TTM P/E of 15.6x sits slightly above the strict 15x strategy sweet spot, though forward estimates of 14.0x suggest valuation normalization.
- • Persistent macroeconomic headwinds in Europe and rising inflation from geopolitical tensions could temporarily pressure regional margins.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.