4Mês·

Teleperformance Used "Collective Punishment" as a Starting Point

Due to the poor results from $CNXC (+0,89%) were dragged down $TEP (-0,99%) was dragged down along with it. $TEP (-0,99%) It had been on my watchlist for a while, so I took advantage of today’s correction to buy in. Yes, I know the discussions about the business model and AI will continue. But Teleperformance remains fundamentally well-positioned, even if the numbers aren’t entirely convincing, and despite all the headwinds, I see this as a solid dividend stock.

30.06

Teleperformance

Comprado x220 em € 46,00

€ 10.120,00

8 Comentários

Raketentoni@Raketentoni

4Mês

Hey Dividendenopi,

Congratulations on your bold move! You really struck while the iron was cold and went against the trend.
The reason Teleperformance took such a massive hit today is because of Concentrix’s (CNXC) lowered outlook. They reported that customers are currently reallocating their budgets and shifting even more heavily toward cheaper offshore locations. Naturally, this has made the entire customer service sector extremely nervous.

But your fundamental assessment of Teleperformance is absolutely justified, and the numbers prove you right:

* **The dividend:**
With the current payout of €4.50 per share, you’ve secured an extremely attractive dividend yield of just under 9.8% based on your entry price of €46.00.

* **Security:**
Management has confirmed its annual targets for 2026. They continue to plan for free cash flow of 800 to 850 million euros. Your dividend is therefore exceptionally well covered by ongoing operations.

* **The AI Transformation:**
The specter of AI looms over the industry, but TEP is actively countering it and has already launched over 550 AI projects for clients.

In short: a classic value play. If you can stoically weather the current noise surrounding the industry, you’ve added a massive cash flow generator to your portfolio.

Good luck with the position! ✌️

•

Frank@schlimmschlimm

4Mês

That's very interesting! Thanks for the post!

•

jkb92@jkb92

4Mês

This could turn out to be a nice false bottom :)

•

jkb92@jkb92

4Mês

@jkb92 I picked up 50 of them myself—thanks for the post.

•

Smudo@Smudeo

4Mês

In free fall since 2021
9/10 of its value back then.
I suspect there’s more going on behind the scenes at the company:
Risks:
AI Disruption: The rise of AI-based chatbots and automation directly threatens the core business—this is considered the biggest structural risk and has weighed heavily on the stock

Share price decline: The stock is currently trading at ~46–47 EUR, representing a drop of over 50% from its 52-week high of 90.72 EUR.

High debt due to the Majorel acquisition

Regulatory risks related to working conditions in low-wage countries

•

Dividendenopi👴@Dividendenopi

4Mês

@Smudeo AI disruption seems to be the killer argument against any stock outside the tech sector—at least that’s how it sometimes seems to me 😉 TP has been in this space for quite some time now and is very active; it has built its own AI platform and is constantly expanding it. The ongoing shift away from the “low-cost” call center business—which will, of course, be replaced by AI for the simpler tasks—and the focus on areas that are difficult to automate also make TP less vulnerable. These are just a few examples. They’re better prepared than one might assume at first glance. We’ll have to wait and see if the market recognizes this in the near future. The interest burden from the Majorel acquisition is easily covered by cash flow, and there’s sufficient buffer for potential refinancing or interest rate hikes. The debt-to-equity ratio isn’t low, true, but it’s well within the investment-grade range. Fundamentally, things aren’t that bad. Earnings are due in a month; we’ll see how things look then.

•

Keineui@Keineui

4Mês

Maybe this would be something for our @investron

•

Kini - Dividend Strategy@investron

4Mês

@Keineui
Hi!
My algorithm places it directly in the "Caution" quadrant.

The 8.4% yield is well covered by FCF (payout ratio of 17.3%), and the P/E ratio of 6.1 appears cheap at first glance. But EPS has been falling for 8 quarters (CAGR -2.1%), and the headcount outsourcing business model faces an existential risk from generative AI that no multiple accounts for.

It might pay off in the long run, but it’s not the stable business I’m looking for.

Thanks for the tag!!

•