BCE (NYSE: BCE) and J2 Global (NASDAQ:JCOM) are both mid-cap utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, earnings, profitability, analyst recommendations, institutional ownership, valuation and dividends.

Institutional & Insider Ownership

44.5% of BCE shares are held by institutional investors. 0.2% of BCE shares are held by insiders. Comparatively, 5.2% of J2 Global shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares BCE and J2 Global’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
BCE 12.78% 20.15% 5.65%
J2 Global 12.60% 26.43% 11.11%

Analyst Ratings

This is a summary of recent ratings and price targets for BCE and J2 Global, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BCE 0 4 4 0 2.50
J2 Global 0 1 3 0 2.75

BCE presently has a consensus target price of $56.75, suggesting a potential upside of 22.17%. J2 Global has a consensus target price of $101.75, suggesting a potential upside of 32.09%. Given J2 Global’s stronger consensus rating and higher possible upside, analysts clearly believe J2 Global is more favorable than BCE.

Earnings & Valuation

This table compares BCE and J2 Global’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
BCE $16.40 billion 2.55 $2.29 billion $2.46 18.88
J2 Global $874.26 million 4.27 $152.43 million $2.70 28.53

BCE has higher revenue and earnings than J2 Global. BCE is trading at a lower price-to-earnings ratio than J2 Global, indicating that it is currently the more affordable of the two stocks.

Dividends

BCE pays an annual dividend of $2.23 per share and has a dividend yield of 4.8%. J2 Global pays an annual dividend of $1.58 per share and has a dividend yield of 2.1%. BCE pays out 90.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. J2 Global pays out 58.5% of its earnings in the form of a dividend.

Risk and Volatility

BCE has a beta of 0.35, meaning that its stock price is 65% less volatile than the S&P 500. Comparatively, J2 Global has a beta of 0.87, meaning that its stock price is 13% less volatile than the S&P 500.

Summary

J2 Global beats BCE on 9 of the 16 factors compared between the two stocks.

About BCE

BCE Inc. is a communications company. The Company’s segments include Bell Wireless, Bell Wireline and Bell Media. Its Bell Wireless segment provides wireless voice and data communications products and services to its residential, small and medium-sized business and large enterprise customers across Canada. Its Bell Wireline segment provides data, including Internet access and Internet protocol television (IPTV), local telephone, long distance, as well as other communications services and products to its residential, small and medium-sized business and large enterprise customers, primarily in Ontario, Quebec and the Atlantic provinces, while Satellite television (TV) service and connectivity to business customers are available nationally across Canada. Its Bell Media segment provides conventional, specialty and pay Television, digital media, and radio broadcasting services and out of home (OOH) advertising services to customers across Canada.

About J2 Global

j2 Global, Inc. is a provider of services delivered through the Internet. The Company provides cloud services to businesses of all sizes, from individuals to enterprises. The Company operates in two segments: Business Cloud Services and Digital Media. The Company’s Digital Media business segment consists of the Web properties and business operations of Ziff Davis, Inc. (Ziff Davis). The Company‚Äôs cloud services and solutions include fax, voice and unified communications, email and customer relationship management, online backup, global network and operations, and customer support services. In February 2013, it acquired IGN Entertainment, Inc. On November 9, 2012, the Company acquired Ziff Davis. Effective March 18, 2013, it acquired MetroFax Inc. In April 2013, the Company acquired Backup Connect BV.

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