Critical Analysis: Telecom Argentina Stet – France Telecom (TEO) versus Shaw Communications (NYSE:SJR)
Telecom Argentina Stet – France Telecom (NYSE: TEO) and Shaw Communications (NYSE:SJR) are both mid-cap utilities companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitabiliy, risk and dividends.
This table compares Telecom Argentina Stet – France Telecom and Shaw Communications’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Telecom Argentina Stet – France Telecom||8.92%||25.23%||10.79%|
Risk and Volatility
Telecom Argentina Stet – France Telecom has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Shaw Communications has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.
Insider and Institutional Ownership
5.8% of Telecom Argentina Stet – France Telecom shares are owned by institutional investors. Comparatively, 50.2% of Shaw Communications shares are owned by institutional investors. 1.0% of Telecom Argentina Stet – France Telecom shares are owned by insiders. Comparatively, 1.0% of Shaw Communications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This is a summary of current ratings and price targets for Telecom Argentina Stet – France Telecom and Shaw Communications, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telecom Argentina Stet – France Telecom||0||1||3||0||2.75|
Telecom Argentina Stet – France Telecom currently has a consensus target price of $26.50, indicating a potential downside of 5.36%. Shaw Communications has a consensus target price of $27.33, indicating a potential upside of 23.23%. Given Shaw Communications’ higher probable upside, analysts plainly believe Shaw Communications is more favorable than Telecom Argentina Stet – France Telecom.
Earnings & Valuation
This table compares Telecom Argentina Stet – France Telecom and Shaw Communications’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Telecom Argentina Stet – France Telecom||$3.28 billion||1.65||$853.77 million||$1.69||16.57|
|Shaw Communications||$4.11 billion||2.66||$1.64 billion||$0.80||27.73|
Shaw Communications has higher revenue and earnings than Telecom Argentina Stet – France Telecom. Telecom Argentina Stet – France Telecom is trading at a lower price-to-earnings ratio than Shaw Communications, indicating that it is currently the more affordable of the two stocks.
Telecom Argentina Stet – France Telecom pays an annual dividend of $0.45 per share and has a dividend yield of 1.6%. Shaw Communications pays an annual dividend of $0.91 per share and has a dividend yield of 4.1%. Telecom Argentina Stet – France Telecom pays out 26.6% of its earnings in the form of a dividend. Shaw Communications pays out 113.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Shaw Communications beats Telecom Argentina Stet – France Telecom on 8 of the 14 factors compared between the two stocks.
About Telecom Argentina Stet – France Telecom
Telecom Argentina S.A. provides fixed-line telecommunications services in Argentina, and also provides other telephone-related services, such as international long-distance service, data transmission, information technology solutions outsourcing and Internet services. The Company’s segments include Fixed Telecommunications Services (Fixed Services), Personal Mobile Telecommunications Services (Personal Mobile Services) and Nucleo Mobile Telecommunications Services (Nucleo Mobile Services). The Company, through its subsidiaries, also provides mobile telecommunications services and international wholesale services. The Fixed services segment consists of basic telephone services, interconnection services, data transmission and Internet services, information and communication technology services, and other telephone services. The Company, through its subsidiaries, such as Telecom Personal S.A. and Nucleo S.A., provides mobile services in Argentina and Paraguay, respectively.
About Shaw Communications
Shaw Communications Inc. (Shaw) is a diversified connectivity provider. The Company operates through four divisions: Consumer, Wireless, Business Network Services and Business Infrastructure Services. Under the Consumer division, the Company offers Cable telecommunications and Satellite video services to residential customers. Its Business Network Services division offers data networking, Cable telecommunications, Satellite video and fleet tracking services to businesses and public sector entities. Its Business Infrastructure Services division offers data center colocation, cloud technology and managed information technology (IT) solutions to businesses. The Company offers wireless services for voice and data communications through its Wireless division. Its wireline services offer approximately 120 high definition (HD) channels and over 10,000 on-demand, pay-per-view and subscription movie and television programming titles.
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