Verizon Communications (VZ) vs. Telecom Argentina Stet – France Telecom (TEO) Critical Contrast
Verizon Communications (NYSE: VZ) and Telecom Argentina Stet – France Telecom (NYSE:TEO) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, profitability and valuation.
This is a summary of recent recommendations and price targets for Verizon Communications and Telecom Argentina Stet – France Telecom, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telecom Argentina Stet – France Telecom||0||2||2||0||2.50|
Verizon Communications presently has a consensus price target of $52.87, indicating a potential upside of 9.05%. Telecom Argentina Stet – France Telecom has a consensus price target of $29.00, indicating a potential downside of 2.19%. Given Verizon Communications’ higher possible upside, equities analysts clearly believe Verizon Communications is more favorable than Telecom Argentina Stet – France Telecom.
Verizon Communications pays an annual dividend of $2.31 per share and has a dividend yield of 4.8%. Telecom Argentina Stet – France Telecom pays an annual dividend of $0.45 per share and has a dividend yield of 1.5%. Verizon Communications pays out 59.2% of its earnings in the form of a dividend. Telecom Argentina Stet – France Telecom pays out 26.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Verizon Communications has raised its dividend for 10 consecutive years. Verizon Communications is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Verizon Communications and Telecom Argentina Stet – France Telecom’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Verizon Communications||$123.64 billion||1.60||$43.95 billion||$3.90||12.43|
|Telecom Argentina Stet – France Telecom||$3.16 billion||1.82||$823.94 million||$1.69||17.54|
Verizon Communications has higher revenue and earnings than Telecom Argentina Stet – France Telecom. Verizon Communications is trading at a lower price-to-earnings ratio than Telecom Argentina Stet – France Telecom, indicating that it is currently the more affordable of the two stocks.
This table compares Verizon Communications and Telecom Argentina Stet – France Telecom’s 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%|
Volatility & Risk
Verizon Communications has a beta of 0.56, suggesting that its stock price is 44% less volatile than the S&P 500. Comparatively, Telecom Argentina Stet – France Telecom has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500.
Institutional and Insider Ownership
62.3% of Verizon Communications shares are held by institutional investors. Comparatively, 6.0% of Telecom Argentina Stet – France Telecom shares are held by institutional investors. 0.1% of Verizon Communications shares are held by company insiders. Comparatively, 1.0% of Telecom Argentina Stet – France Telecom shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Verizon Communications beats Telecom Argentina Stet – France Telecom on 10 of the 17 factors compared between the two stocks.
Verizon Communications Company Profile
Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its segments include Wireless and Wireline. The Wireless segment offers communications products and services, including wireless voice and data services and equipment sales, to consumer, business and government customers across the United States. The Wireline segment offers voice, data and video communications products and services, such as broadband video, data center and cloud services, security and managed network services, and local and long distance voice services. The Company has combined Yahoo! Inc.’s operating assets with its existing AOL Inc. business to create a new subsidiary, Oath Inc., owns a diverse house of more than 50 media and technology brands. The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, Yahoo Finance and Yahoo Mail.
Telecom Argentina Stet – France Telecom Company Profile
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.
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