Shaw Communications (NYSE: SJR) and Frontier Communications Corporation (NASDAQ:FTR) are both consumer discretionary companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Earnings and Valuation

This table compares Shaw Communications and Frontier Communications Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Shaw Communications $4.18 billion 2.60 $1.67 billion $0.80 27.50
Frontier Communications Corporation $9.59 billion 0.12 $3.74 billion ($14.42) -1.03

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

Dividends

Shaw Communications pays an annual dividend of $0.91 per share and has a dividend yield of 4.1%. Frontier Communications Corporation pays an annual dividend of $2.40 per share and has a dividend yield of 16.1%. 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. Frontier Communications Corporation pays out -16.6% of its earnings in the form of a dividend. Frontier Communications Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Shaw Communications and Frontier Communications Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shaw Communications 1 3 3 0 2.29
Frontier Communications Corporation 2 9 2 0 2.00

Shaw Communications currently has a consensus target price of $27.33, indicating a potential upside of 24.24%. Frontier Communications Corporation has a consensus target price of $6.01, indicating a potential downside of 59.66%. Given Shaw Communications’ stronger consensus rating and higher probable upside, research analysts clearly believe Shaw Communications is more favorable than Frontier Communications Corporation.

Risk and Volatility

Shaw Communications has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, Frontier Communications Corporation has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Profitability

This table compares Shaw Communications and Frontier Communications Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shaw Communications 10.01% 9.31% 3.57%
Frontier Communications Corporation -9.35% -1.28% -0.19%

Insider & Institutional Ownership

53.2% of Shaw Communications shares are owned by institutional investors. 1.0% of Shaw Communications shares are owned by insiders. Comparatively, 0.9% of Frontier Communications Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Shaw Communications beats Frontier Communications Corporation on 11 of the 15 factors compared between the two stocks.

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.

About Frontier Communications Corporation

Frontier Communications Corporation (Frontier) is a provider of communications services in the United States. The Company offers a portfolio of communications services for residential and business customers. Its products and services include data and Internet services, video services, voice services, access services and customer premise equipment (CPE). The Company offers a range of broadband services. The principal residential service it provides is broadband Internet service. Its commercial services include Ethernet, Dedicated Internet, Multiprotocol Label Switching (MPLS), Time Division Multiplexing (TDM) data transport services and optical transport services. It also offers wireless broadband services (using unlicensed spectrum) in various markets utilizing networks that it owns or operates. In addition, the Company offers its Frontier Secure suite of products, including computer security, cloud backup and sharing, identity protection and equipment insurance.

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