Analyzing United States Cellular (USM) & Rogers Communication (RCI)

United States Cellular (NYSE: USM) and Rogers Communication (NYSE:RCI) are both mid-cap computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, analyst recommendations, profitability, dividends and valuation.

Profitability

This table compares United States Cellular and Rogers Communication’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
United States Cellular -6.93% 0.94% 0.49%
Rogers Communication 9.20% 30.40% 6.09%

Volatility & Risk

United States Cellular has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Rogers Communication has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Dividends

Rogers Communication pays an annual dividend of $1.54 per share and has a dividend yield of 2.9%. United States Cellular does not pay a dividend. Rogers Communication 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.

Analyst Recommendations

This is a summary of current recommendations and price targets for United States Cellular and Rogers Communication, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
United States Cellular 1 2 0 0 1.67
Rogers Communication 0 4 2 0 2.33

United States Cellular currently has a consensus price target of $35.50, indicating a potential downside of 6.11%. Rogers Communication has a consensus price target of $62.50, indicating a potential upside of 19.69%. Given Rogers Communication’s stronger consensus rating and higher probable upside, analysts plainly believe Rogers Communication is more favorable than United States Cellular.

Earnings & Valuation

This table compares United States Cellular and Rogers Communication’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
United States Cellular $3.94 billion 0.82 $48.00 million ($3.13) -12.08
Rogers Communication $10.35 billion 2.60 $630.59 million $1.90 27.48

Rogers Communication has higher revenue and earnings than United States Cellular. United States Cellular is trading at a lower price-to-earnings ratio than Rogers Communication, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

14.7% of United States Cellular shares are owned by institutional investors. Comparatively, 47.2% of Rogers Communication shares are owned by institutional investors. 1.6% of United States Cellular shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Rogers Communication beats United States Cellular on 13 of the 16 factors compared between the two stocks.

About United States Cellular

United States Cellular Corporation (U.S. Cellular) is a provider of wireless telecommunication services. The Company’s wireless operating markets are in the United States. U.S. Cellular provides service to postpaid and prepaid customers from a range of demographic segments. The Company focuses on retail consumers, government and small-to-mid-size business customers in industries, such as construction, retail, professional services and real estate. The Company offers a range of wireless devices, such as handsets, modems, mobile hotspots, home phones and tablets for use by its customers. U.S. Cellular offers wireless devices that are compatible with fourth generation long term evolution (4G LTE) and third generation (3G) networks. U.S. Cellular offers a range of accessories, such as carrying cases, hands-free devices, batteries, battery chargers, and memory cards to related consumer electronics, such as headphones, speakers and Bluetooth keyboards.

About Rogers Communication

Rogers Communications Inc. is a communications and media company. The Company provides wireless communications services, and cable television, Internet, information technology (IT) and telephony services to consumers and businesses. Its segments include Wireless, Cable, Business Solutions and Media. The Wireless segment is engaged in wireless telecommunications operations for Canadian consumers and businesses. The Cable segment include cable telecommunications operations, including Internet, television and telephony (phone) services for Canadian consumers and businesses. The Business Solutions segment is engaged in network connectivity through its fiber network and data center assets to support a range of voice, data, networking, hosting, and cloud-based services for the enterprise, public sector and carrier wholesale markets. The Media segment has a portfolio of media properties, including sports media and entertainment, multi-platform shopping, digital media and publishing.

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