Telefonica (NYSE: TEF) and ATN International (NASDAQ:ATNI) are both utilities companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, profitability, valuation, analyst recommendations, dividends, earnings and risk.

Earnings & Valuation

This table compares Telefonica and ATN International’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telefonica $57.59 billion 0.88 $2.62 billion $0.50 20.06
ATN International $457.00 million 1.95 $12.10 million ($0.61) -90.98

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

Profitability

This table compares Telefonica and ATN International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telefonica 4.95% 29.25% 6.62%
ATN International -1.93% 3.34% 2.26%

Dividends

Telefonica pays an annual dividend of $0.17 per share and has a dividend yield of 1.7%. ATN International pays an annual dividend of $0.68 per share and has a dividend yield of 1.2%. Telefonica pays out 34.0% of its earnings in the form of a dividend. ATN International pays out -111.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Telefonica has increased its dividend for 15 consecutive years. Telefonica is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Telefonica and ATN International, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telefonica 1 3 5 0 2.44
ATN International 0 2 0 0 2.00

Telefonica presently has a consensus price target of $11.40, suggesting a potential upside of 13.66%. ATN International has a consensus price target of $57.00, suggesting a potential upside of 2.70%. Given Telefonica’s stronger consensus rating and higher possible upside, equities analysts clearly believe Telefonica is more favorable than ATN International.

Insider and Institutional Ownership

0.9% of Telefonica shares are owned by institutional investors. Comparatively, 58.4% of ATN International shares are owned by institutional investors. 0.0% of Telefonica shares are owned by insiders. Comparatively, 32.7% of ATN International shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Telefonica has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, ATN International has a beta of 0.61, indicating that its share price is 39% less volatile than the S&P 500.

Summary

Telefonica beats ATN International on 12 of the 17 factors compared between the two stocks.

About Telefonica

Telefonica, S.A. is an integrated and diversified telecommunications group operating in Europe and Latin America. The Company’s services and products include Mobile business, Fixed-line telephony business and Digital services. Its segments include Telefonica Spain, Telefonica Brazil, Telefonica Germany, Telefonica United Kingdom and Telefonica Hispanoamerica (formed by the Company’s operators in Argentina, Chile, Peru, Colombia, Mexico, Venezuela and Central America, Ecuador and Uruguay). These segments are engaged in activities relating to wireline, wireless, cable, data, Internet and television (TV) businesses and other digital services in accordance with each location. It offers a range of mobile and related services and products to personal and business customers. It offers traditional fixed telecommunication services, Internet and broadband multimedia services and data and business-solutions services. It offers a range of digital services, such as Internet of Things (IoT).

About ATN International

ATN International, Inc. (ATN), formerly Atlantic Tele-Network, Inc., is a holding company. The Company’s segments include U.S. Telecom, International Telecom and Renewable Energy. In the United States, it provides wholesale wireless voice and data roaming services in rural markets to national, regional, local and selected international wireless carriers. Its wholesale networks are located principally in the western United States. It provides wireless voice and data service to retail and business customers in Bermuda under the One name, in Guyana under the GTT name and in the United States Virgin Islands under the Innovative and Choice brand names. The Company offers voice services that include local exchange, regional and long distance calling and voice messaging services in Bermuda, Guyana, the United States Virgin Islands, and in other smaller markets in the Caribbean and the United States. It offers services, which include Wireless, Wireline and Renewable Energy.

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