Orange SA (NASDAQ: ORAN) and Level 3 Communications (NYSE:LVLT) are both large-cap telecommunications services companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, valuation, analyst recommendations, earnings, institutional ownership and profitability.

Insider and Institutional Ownership

98.7% of Level 3 Communications shares are held by institutional investors. 0.5% of Level 3 Communications shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Orange SA and Level 3 Communications’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Orange SA $48.16 billion 0.92 $14.23 billion N/A N/A
Level 3 Communications $8.17 billion 2.34 $2.66 billion $1.76 30.01

Orange SA has higher revenue and earnings than Level 3 Communications.

Profitability

This table compares Orange SA and Level 3 Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orange SA 4.09% 4.47% 1.76%
Level 3 Communications 7.85% 5.80% 2.55%

Analyst Ratings

This is a summary of current ratings and recommmendations for Orange SA and Level 3 Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orange SA 2 1 3 0 2.17
Level 3 Communications 1 11 2 0 2.07

Orange SA presently has a consensus price target of $16.00, suggesting a potential downside of 3.85%. Level 3 Communications has a consensus price target of $61.03, suggesting a potential upside of 15.57%. Given Level 3 Communications’ higher possible upside, analysts plainly believe Level 3 Communications is more favorable than Orange SA.

Summary

Level 3 Communications beats Orange SA on 7 of the 12 factors compared between the two stocks.

About Orange SA

Orange SA is a telecommunications operator. The Company also provides telecommunication services to multinational companies, under the brand Orange Business Services. The Company’s segments include France, Spain, Poland, Belgium and Luxembourg, Central European countries, Africa and Middle East, Enterprise, and International Carriers & Shared Services. The Company provides consumers, businesses and other telecommunications operators with a range of services, including fixed telephony and mobile telecommunications, data transmission and other value-added services, mainly in Europe, Africa and the Middle East. The Company offers fixed-line telephony, mobile telephony and Internet services in France. The Company offers fixed-line telephony, mobile telephony and Internet services in Spain. The Company offers fixed-line and mobile telephony, and Internet services in Poland. The Company operates through Mobistar and Groupama Banque SA.

About Level 3 Communications

Level 3 Communications, Inc. is a provider of a range of integrated communications services. The Company’s operating segments include North America, EMEA and Latin America. The North America includes operations in Atlanta, Georgia; Littleton, Colorado; Miami, Florida; Montreal, Canada; New York, New York; Phoenix, Arizona; Pittsburgh, Pennsylvania; Southfield, Michigan, and Tulsa, Oklahoma. The Europe segment includes operations in Basingstoke, England; Crewe, England; Dublin, Ireland; London, England; Amsterdam, The Netherlands, and Paris, France. The Latin America includes operations in Colombia; Buenos Aires, Argentina; Caracas, Venezuela; Lima, Peru; Quito, Ecuador; Santiago, Chile, and Sao Paulo, Brazil. It offers optical, Internet Protocol, computing and storage technologies. It offers a range of communications services, including Internet Protocol (IP) and data services, transport and fiber services, colocation and data center services, security services and voice services.

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