Shaw Communications (NYSE: SJR) and PLDT (NYSE:PHI) are both mid-cap integrated telecommunications services – nec companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, valuation, institutional ownership, earnings, profitability, risk and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings for Shaw Communications and PLDT, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shaw Communications 1 4 1 0 2.00
PLDT 1 1 2 0 2.25

Shaw Communications presently has a consensus price target of $27.20, suggesting a potential upside of 22.63%. Given Shaw Communications’ higher possible upside, equities research analysts clearly believe Shaw Communications is more favorable than PLDT.

Insider & Institutional Ownership

51.2% of Shaw Communications shares are held by institutional investors. Comparatively, 9.2% of PLDT shares are held by institutional investors. 1.0% of Shaw Communications shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Shaw Communications 16.80% 9.54% 3.69%
PLDT 16.32% 25.24% 6.21%

Risk & Volatility

Shaw Communications has a beta of 0.97, indicating that its stock price is 3% less volatile than the S&P 500. Comparatively, PLDT has a beta of 0.99, indicating that its stock price is 1% less volatile than the S&P 500.

Dividends

Shaw Communications pays an annual dividend of $0.92 per share and has a dividend yield of 4.1%. PLDT pays an annual dividend of $1.23 per share and has a dividend yield of 3.7%. Shaw Communications pays out 107.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. PLDT pays out -35.1% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Shaw Communications and PLDT’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Shaw Communications $3.70 billion 2.84 $644.63 million $0.86 25.79
PLDT $3.49 billion 2.07 $422.12 million ($3.50) -9.53

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

Summary

Shaw Communications beats PLDT on 10 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.

PLDT Company Profile

PLDT, Inc., formerly Philippine Long Distance Telephone Company (PLDT), is a telecommunications service provider in the Philippines. The Company operates through three business segments: Wireless, Fixed Line and Others. The Company, through its business segments, offers a range of telecommunications services across the Philippines’ fiber optic backbone and wireless and fixed line networks. The Company’s wireless segment provides cellular, wireless broadband and other services, and digital platforms and mobile financial services. Its Fixed Line segment provides local exchange, international long distance, national long distance, data and other network and miscellaneous services under its fixed line business. It offers postpaid and prepaid fixed line services. Its Other business consists of PLDT Communications and Energy Ventures, Inc. (PCEV), an investment holding company. It also focuses on providing wireless voice communications and wireless data communications.

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