Telecom Italia S.P.A. (NYSE: TI) and Telefonica Brasil (NYSE:VIV) are both large-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Insider & Institutional Ownership

0.8% of Telecom Italia S.P.A. shares are owned by institutional investors. Comparatively, 11.0% of Telefonica Brasil shares are owned by institutional investors. 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.

Earnings and Valuation

This table compares Telecom Italia S.P.A. and Telefonica Brasil’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Telecom Italia S.P.A. $23.27 billion 0.91 $10.08 billion N/A N/A
Telefonica Brasil $13.70 billion 1.85 $4.50 billion $0.74 20.24

Telecom Italia S.P.A. has higher revenue and earnings than Telefonica Brasil.

Profitability

This table compares Telecom Italia S.P.A. and Telefonica Brasil’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telecom Italia S.P.A. N/A N/A N/A
Telefonica Brasil 9.41% 5.91% 3.97%

Dividends

Telefonica Brasil pays an annual dividend of $0.65 per share and has a dividend yield of 4.3%. Telecom Italia S.P.A. does not pay a dividend. Telefonica Brasil pays out 87.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telefonica Brasil has increased its dividend for 4 consecutive years.

Risk & Volatility

Telecom Italia S.P.A. has a beta of 1.04, meaning that its stock price is 4% more volatile than the S&P 500. Comparatively, Telefonica Brasil has a beta of 1.34, meaning that its stock price is 34% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Telecom Italia S.P.A. and Telefonica Brasil, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telecom Italia S.P.A. 0 3 2 0 2.40
Telefonica Brasil 0 2 1 0 2.33

Telefonica Brasil has a consensus price target of $15.00, suggesting a potential upside of 0.13%. Given Telefonica Brasil’s higher possible upside, analysts plainly believe Telefonica Brasil is more favorable than Telecom Italia S.P.A..

Summary

Telefonica Brasil beats Telecom Italia S.P.A. on 9 of the 14 factors compared between the two stocks.

About Telecom Italia S.P.A.

Telecom Italia S.p.A. (Telecom Italia) operates fixed voice and data infrastructure in Italy, and provides mobile network platforms. The Company focuses on various areas of digital services, including Enriched Communication, Trusted Digital Life, Business Life, Indoor Life, Mobile Open Life and Digital Entertainment. Its segments include Consumer, Business, National Wholesale and Other. It is engaged in developing various projects in areas, including Smart Green, Social Reading, Solutions for good schooling, Digital tourism 2.0, Smart Home, FriendTV and Big Data. Smart Green is the assessment of projects connected with the environment and potential partnerships with the local government offices for the monitoring of air in public offices and urban areas, using networks of sensors connected to the Company’s Cloud. The Company is involved, either alone or in partnership with external partners, in devising and developing healthcare services at national, regional and local level.

About Telefonica Brasil

Telefonica Brasil S.A. is a mobile telecommunications company in Brazil offering postpaid mobile services. The Company also operates as a fixed telecommunications company in the state of Sao Paulo. The Company markets its mobile services under its Vivo brand. It offers its clients a portfolio of products, including mobile and fixed voice, mobile data, fixed broadband, ultra-fast broadband, Pay television, information technology and digital services. Its operations consist of local and long distance fixed telephone services; mobile services, including value-added services; data services, including broadband services and mobile data services; Pay television services through direct to home (DTH), Internet protocol television (IPTV) and cable; network services, such as rental of facilities, as well as other services; wholesale services, including interconnection; digital services; services designed specifically for corporate customers, and the sale of wireless devices and accessories.

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