Neustar (NYSE: NSR) and Shaw Communications (NYSE:SJR) are both computer and technology companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, risk, profitabiliy and dividends.

Valuation & Earnings

This table compares Neustar and Shaw Communications’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Neustar $1.22 billion 1.53 $473.09 million $3.27 10.24
Shaw Communications $4.18 billion 2.56 $1.67 billion $0.80 27.11

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

Risk & Volatility

Neustar has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500. Comparatively, Shaw Communications has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.

Dividends

Shaw Communications pays an annual dividend of $0.91 per share and has a dividend yield of 4.2%. Neustar does not pay 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for Neustar and Shaw Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neustar 0 3 0 0 2.00
Shaw Communications 1 3 3 0 2.29

Neustar presently has a consensus target price of $29.50, suggesting a potential downside of 11.94%. Shaw Communications has a consensus target price of $27.33, suggesting a potential upside of 26.02%. Given Shaw Communications’ stronger consensus rating and higher possible upside, analysts clearly believe Shaw Communications is more favorable than Neustar.

Insider and Institutional Ownership

88.8% of Neustar shares are held by institutional investors. Comparatively, 53.2% of Shaw Communications shares are held by institutional investors. 2.9% of Neustar shares are held by insiders. Comparatively, 1.0% of Shaw Communications shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Neustar and Shaw Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neustar 15.03% 32.93% 13.97%
Shaw Communications 10.01% 9.31% 3.57%

Neustar Company Profile

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

Shaw Communications Company Profile

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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