Neustar (NYSE: NSR) and IDT Corporation (NYSE:IDT) are both telecommunications services companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, institutional ownership, earnings, valuation and dividends.

Dividends

IDT Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 5.6%. Neustar does not pay a dividend. IDT Corporation pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

Neustar has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, IDT Corporation has a beta of 1.13, indicating that its share price is 13% more volatile than the S&P 500.

Institutional & Insider Ownership

88.8% of Neustar shares are owned by institutional investors. Comparatively, 52.0% of IDT Corporation shares are owned by institutional investors. 2.9% of Neustar shares are owned by insiders. Comparatively, 12.8% of IDT Corporation shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Neustar and IDT Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neustar 15.50% 19.28% 8.80%
IDT Corporation 0.55% 14.44% 4.56%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Neustar and IDT Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neustar 0 3 0 0 2.00
IDT Corporation 0 0 0 0 N/A

Neustar presently has a consensus target price of $29.50, suggesting a potential downside of 11.94%. Given Neustar’s higher possible upside, equities research analysts clearly believe Neustar is more favorable than IDT Corporation.

Valuation and Earnings

This table compares Neustar and IDT Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Neustar N/A N/A N/A $3.27 10.24
IDT Corporation $1.50 billion 0.22 $27.32 million $0.38 35.58

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

Summary

Neustar beats IDT Corporation on 8 of the 11 factors compared between the two stocks.

Neustar Company Profile

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

IDT Corporation Company Profile

IDT Corporation is a holding company with operations primarily in the telecommunications and payment industries. The Company’s segments include Telecom Platform Services, Consumer Phone Services and All Other. The Company’s Telecom Platform Services segment provides retail telecommunications and payment offerings, as well as wholesale international long distance traffic termination. The Telecom Platform Services segment markets and distributes multiple communications and payment services across four businesses: Retail Communications, Wholesale Carrier Services, Payment Services and Hosted Platform Solutions. The Company’s Consumer Phone Services segment provides consumer local and long distance services in certain states of the United States. The Telecom Platform Services and Consumer Phone Services segments comprise the Company’s IDT Telecom division. The All Other segment includes its real estate holdings and other smaller businesses.

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