Critical Review: CenturyLink (CTL) versus its Competitors
CenturyLink (NYSE: CTL) is one of 47 public companies in the “Integrated Telecommunications Services” industry, but how does it contrast to its rivals? We will compare CenturyLink to similar businesses based off the strength of its institutional ownership, earnings, analyst recommendations, valuation, dividends, profitability and risk.
Earnings and Valuation
This table compares CenturyLink and its rivals top-line revenue, earnings per share and valuation.
|Gross Revenue||EBITDA||Price/Earnings Ratio|
|CenturyLink||$16.97 billion||$6.06 billion||26.87|
|CenturyLink Competitors||$12.57 billion||$4.19 billion||1.12|
CenturyLink has higher revenue and earnings than its rivals. CenturyLink is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently the more expensive than other companies in its industry.
Risk and Volatility
CenturyLink has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500. Comparatively, CenturyLink’s rivals have a beta of 1.07, indicating that their average stock price is 7% more volatile than the S&P 500.
CenturyLink pays an annual dividend of $2.16 per share and has a dividend yield of 11.7%. CenturyLink pays out 313.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Integrated Telecommunications Services” companies pay a dividend yield of 5.1% and pay out 833.6% of their earnings in the form of a dividend. CenturyLink is clearly a better dividend stock than its rivals, given its higher yield and lower payout ratio.
This table compares CenturyLink and its rivals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current ratings and price targets for CenturyLink and its rivals, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
CenturyLink presently has a consensus target price of $25.55, suggesting a potential upside of 37.79%. All “Integrated Telecommunications Services” companies have a potential upside of 32.34%. Given CenturyLink’s higher possible upside, research analysts clearly believe CenturyLink is more favorable than its rivals.
Institutional & Insider Ownership
83.0% of CenturyLink shares are owned by institutional investors. Comparatively, 56.1% of shares of all “Integrated Telecommunications Services” companies are owned by institutional investors. 0.6% of CenturyLink shares are owned by company insiders. Comparatively, 4.4% of shares of all “Integrated Telecommunications Services” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
CenturyLink beats its rivals on 10 of the 15 factors compared.
CenturyLink Company Profile
CenturyLink, Inc. is an integrated communications company. The Company is engaged in providing an array of communications services to its residential and business customers. Its segments include business, which provides strategic, legacy and data integration products and services to small, medium and enterprise business, wholesale and governmental customers, including other communication providers, and consumer, which provides strategic and legacy products and services to residential customers. Its communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching (MPLS), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol (VoIP), information technology and other ancillary services. As of December 31, 2016, it served approximately 5.9 million broadband subscribers and 325,000 Prism TV subscribers.
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