Alaska Communications Systems Group (NASDAQ: ALSK) and Shenandoah Telecommunications (NASDAQ:SHEN) are both small-cap utilities companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitabiliy, valuation, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Alaska Communications Systems Group and Shenandoah Telecommunications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Alaska Communications Systems Group 0.71% 1.97% 0.67%
Shenandoah Telecommunications -2.08% 9.79% 2.01%

Analyst Recommendations

This is a breakdown of recent ratings for Alaska Communications Systems Group and Shenandoah Telecommunications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Alaska Communications Systems Group 0 0 1 0 3.00
Shenandoah Telecommunications 0 0 2 0 3.00

Alaska Communications Systems Group currently has a consensus target price of $3.00, indicating a potential upside of 38.25%. Shenandoah Telecommunications has a consensus target price of $34.00, indicating a potential upside of 17.65%. Given Alaska Communications Systems Group’s higher probable upside, equities analysts plainly believe Alaska Communications Systems Group is more favorable than Shenandoah Telecommunications.

Dividends

Shenandoah Telecommunications pays an annual dividend of $0.25 per share and has a dividend yield of 0.9%. Alaska Communications Systems Group does not pay a dividend. Shenandoah Telecommunications pays out -100.0% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Alaska Communications Systems Group and Shenandoah Telecommunications’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Alaska Communications Systems Group $227.27 million 0.50 $55.16 million $0.04 54.26
Shenandoah Telecommunications $596.60 million 2.38 $264.02 million ($0.25) -115.60

Shenandoah Telecommunications has higher revenue and earnings than Alaska Communications Systems Group. Shenandoah Telecommunications is trading at a lower price-to-earnings ratio than Alaska Communications Systems Group, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

41.3% of Alaska Communications Systems Group shares are held by institutional investors. Comparatively, 49.1% of Shenandoah Telecommunications shares are held by institutional investors. 6.5% of Alaska Communications Systems Group shares are held by company insiders. Comparatively, 7.2% of Shenandoah Telecommunications shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Alaska Communications Systems Group has a beta of -0.12, indicating that its stock price is 112% less volatile than the S&P 500. Comparatively, Shenandoah Telecommunications has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

Summary

Shenandoah Telecommunications beats Alaska Communications Systems Group on 12 of the 15 factors compared between the two stocks.

Alaska Communications Systems Group Company Profile

Alaska Communications Systems Group, Inc. is a fiber broadband and managed information technology (IT) services provider. The Company is focused primarily on business and wholesale customers in and out of Alaska. The Company also provides telecommunication services to consumers across Alaska. The Company’s facilities-based communications network extends across Alaska and connects to the contiguous states through its undersea fiber optic cable systems and its usage rights on an undersea system. It serves customers in various areas, such as Business and Wholesale (broadband, voice and managed IT services); Consumer (broadband and voice services), and Other Services (including carrier termination, equipment sales, access services and support services receiving federal support funding). It provides voice and broadband services to residential customers. It provides voice and broadband origination and termination services to inter and intrastate carriers serving its retail customers.

Shenandoah Telecommunications Company Profile

Shenandoah Telecommunications Company is a telecommunications holding company. The Company’s segments are Wireless, Cable, Wireline and Other. The Company, through its operating subsidiaries, provides both regulated and unregulated telecommunications services to end user customers and other telecommunications providers in Virginia, West Virginia, central Pennsylvania, western Maryland, and portions of Kentucky and Ohio. The business of the Wireless segment is conducted principally by the Company’s subsidiary, Shenandoah Personal Communications, LLC (PCS). The business of the Company’s Cable segment is conducted through Shenandoah Cable Television, LLC (Shenandoah Cable). The Wireline segment provides regulated and unregulated voice services, digital subscriber line (DSL) Internet access, cable modem and long distance access services throughout Shenandoah County and portions of Rockingham, Frederick, Warren and Augusta counties, Virginia.

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