OI (NYSE: OIBR) and Telefonica Brasil (NYSE:VIV) are both integrated telecommunications services – nec companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, analyst recommendations, risk, dividends, earnings and valuation.
Insider and Institutional Ownership
9.3% of Telefonica Brasil shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
OI has a beta of 2.2, indicating that its share price is 120% more volatile than the S&P 500. Comparatively, Telefonica Brasil has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for OI and Telefonica Brasil, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Telefonica Brasil has a consensus price target of $16.03, suggesting a potential downside of 3.36%. Given Telefonica Brasil’s higher probable upside, analysts plainly believe Telefonica Brasil is more favorable than OI.
This table compares OI and Telefonica Brasil’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares OI and Telefonica Brasil’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Telefonica Brasil||$12.25 billion||2.29||$1.17 billion||$0.81||20.48|
Telefonica Brasil has higher revenue and earnings than OI. OI is trading at a lower price-to-earnings ratio than Telefonica Brasil, indicating that it is currently the more affordable of the two stocks.
Telefonica Brasil pays an annual dividend of $0.95 per share and has a dividend yield of 5.7%. OI does not pay a dividend. Telefonica Brasil pays out 117.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telefonica Brasil has raised its dividend for 5 consecutive years.
Telefonica Brasil beats OI on 11 of the 13 factors compared between the two stocks.
OI Company Profile
Oi S.A. is an integrated telecommunications service provider in Brazil. The Company is a switched fixed-line telephony services (STFC) concessionaire. It is engaged in the provision of STFC as a local and intraregional long-distance carrier. Its segments include Residential Services, Personal Mobility, and SMEs/Corporate. It offers a range of integrated telecommunications services that include fixed and mobile, broadband, pay television (TV), data transmission and Internet provider services. The Company’s Residential Services segment is focused on the sale of fixed telephony services, including voice services, data communication services (broadband), and pay TV. The Personal Mobility segment is focused on the sale of mobile telephony services to subscription and prepaid customers, and mobile broadband customer. The SMEs/Corporate segment includes corporate solutions offered to its small, medium-sized, and large corporate customers.
Telefonica Brasil Company Profile
Telefonica Brasil S.A. is a mobile telecommunications company in Brazil offering postpaid mobile services. The Company also operates as a fixed telecommunications company in the state of Sao Paulo. The Company markets its mobile services under its Vivo brand. It offers its clients a portfolio of products, including mobile and fixed voice, mobile data, fixed broadband, ultra-fast broadband, Pay television, information technology and digital services. Its operations consist of local and long distance fixed telephone services; mobile services, including value-added services; data services, including broadband services and mobile data services; Pay television services through direct to home (DTH), Internet protocol television (IPTV) and cable; network services, such as rental of facilities, as well as other services; wholesale services, including interconnection; digital services; services designed specifically for corporate customers, and the sale of wireless devices and accessories.
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