Rogers Communications (NYSE: RCI) and United States Cellular (NYSE:USM) are both mid-cap consumer discretionary companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, profitability, dividends, analyst recommendations, earnings, institutional ownership and valuation.

Analyst Ratings

This is a summary of current ratings and target prices for Rogers Communications and United States Cellular, as reported by MarketBeat.com.

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

Rogers Communications presently has a consensus price target of $62.50, indicating a potential upside of 21.29%. United States Cellular has a consensus price target of $35.50, indicating a potential downside of 5.61%. Given Rogers Communications’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Rogers Communications is more favorable than United States Cellular.

Valuation & Earnings

This table compares Rogers Communications and United States Cellular’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rogers Communications $10.35 billion 2.56 $630.59 million $1.89 27.26
United States Cellular $3.94 billion 0.81 $48.00 million ($3.13) -12.02

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

Risk & Volatility

Rogers Communications has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, United States Cellular has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500.

Profitability

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

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

Insider and Institutional Ownership

47.2% of Rogers Communications shares are owned by institutional investors. Comparatively, 14.8% of United States Cellular 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 endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Rogers Communications pays an annual dividend of $1.54 per share and has a dividend yield of 3.0%. United States Cellular does not pay a dividend. Rogers Communications pays out 81.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

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

Rogers Communications Company Profile

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.

United States Cellular Company Profile

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.

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