Shaw Communications (NYSE: SJR) and Telefonica Brasil (NYSE:VIV) are both large-cap consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Valuation and Earnings

This table compares Shaw Communications and Telefonica Brasil’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Shaw Communications $4.31 billion 2.49 $1.72 billion $0.80 27.16
Telefonica Brasil $13.46 billion 2.02 $4.42 billion $0.74 21.78

Telefonica Brasil has higher revenue and earnings than Shaw Communications. Telefonica Brasil is trading at a lower price-to-earnings ratio than Shaw Communications, indicating that it is currently the more affordable of the two stocks.

Dividends

Shaw Communications pays an annual dividend of $0.95 per share and has a dividend yield of 4.4%. Telefonica Brasil pays an annual dividend of $0.60 per share and has a dividend yield of 3.7%. Shaw Communications pays out 118.8% 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 pays out 81.1% 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.

Profitability

This table compares Shaw Communications and Telefonica Brasil’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shaw Communications 10.01% 9.31% 3.57%
Telefonica Brasil 9.41% 5.91% 3.97%

Volatility & Risk

Shaw Communications has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500. Comparatively, Telefonica Brasil has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Shaw Communications and Telefonica Brasil, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shaw Communications 1 4 2 0 2.14
Telefonica Brasil 0 2 2 0 2.50

Shaw Communications currently has a consensus target price of $27.33, indicating a potential upside of 25.79%. Telefonica Brasil has a consensus target price of $15.67, indicating a potential downside of 2.81%. Given Shaw Communications’ higher possible upside, equities analysts plainly believe Shaw Communications is more favorable than Telefonica Brasil.

Institutional and Insider Ownership

51.8% of Shaw Communications shares are held by institutional investors. Comparatively, 10.0% of Telefonica Brasil shares are held by institutional investors. 1.0% of Shaw Communications shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Shaw Communications beats Telefonica Brasil on 9 of the 16 factors compared between the two stocks.

Shaw Communications Company Profile

Shaw Communications Inc. (Shaw) is a diversified connectivity provider. The Company operates through four divisions: Consumer, Wireless, Business Network Services and Business Infrastructure Services. Under the Consumer division, the Company offers Cable telecommunications and Satellite video services to residential customers. Its Business Network Services division offers data networking, Cable telecommunications, Satellite video and fleet tracking services to businesses and public sector entities. Its Business Infrastructure Services division offers data center colocation, cloud technology and managed information technology (IT) solutions to businesses. The Company offers wireless services for voice and data communications through its Wireless division. Its wireline services offer approximately 120 high definition (HD) channels and over 10,000 on-demand, pay-per-view and subscription movie and television programming titles.

Telefonica Brasil Company Profile

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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