Analyzing Cincinnati Bell (CBB) and IDT (IDT)

Cincinnati Bell (NYSE: CBB) and IDT (NYSE:IDT) are both small-cap utilities companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Institutional & Insider Ownership

83.5% of Cincinnati Bell shares are owned by institutional investors. Comparatively, 52.5% of IDT shares are owned by institutional investors. 1.4% of Cincinnati Bell shares are owned by company insiders. Comparatively, 21.8% of IDT shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Cincinnati Bell and IDT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cincinnati Bell 0 2 0 0 2.00
IDT 0 0 0 0 N/A

Cincinnati Bell currently has a consensus target price of $24.00, suggesting a potential upside of 35.21%. Given Cincinnati Bell’s higher possible upside, equities analysts plainly believe Cincinnati Bell is more favorable than IDT.

Dividends

IDT pays an annual dividend of $0.76 per share and has a dividend yield of 6.9%. Cincinnati Bell does not pay a dividend. IDT pays out -115.2% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Cincinnati Bell and IDT’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cincinnati Bell $1.19 billion 0.63 $102.10 million $0.94 18.88
IDT $1.50 billion 0.18 $8.17 million ($0.66) -16.67

Cincinnati Bell has higher earnings, but lower revenue than IDT. IDT is trading at a lower price-to-earnings ratio than Cincinnati Bell, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Cincinnati Bell has a beta of 1.52, suggesting that its stock price is 52% more volatile than the S&P 500. Comparatively, IDT has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

Profitability

This table compares Cincinnati Bell and IDT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cincinnati Bell 4.13% -2.69% 0.46%
IDT -1.03% 7.53% 2.31%

Summary

Cincinnati Bell beats IDT on 8 of the 14 factors compared between the two stocks.

About Cincinnati Bell

Cincinnati Bell Inc., along with its subsidiaries, provides diversified telecommunications and technology services. The Company operates through two segments: Entertainment and Communications, and IT Services and Hardware. Through its Entertainment and Communications segment, the Company provides high-speed data, video and voice solutions to consumers and businesses over fiber network and a legacy copper network. The IT Services and Hardware segments operates through its subsidiary, Cincinnati Bell Technology Solutions Inc. (CBTS), which is engaged in the sale and service of end-to-end communications and information technology (IT) systems and solutions for business customers across the United States. The Company has interest in CyrusOne Inc., which operates carrier-neutral data center colocation business.

About IDT

IDT Corporation is a holding company with operations primarily in the telecommunications and payment industries. The Company’s segments include Telecom Platform Services, Consumer Phone Services and All Other. The Company’s Telecom Platform Services segment provides retail telecommunications and payment offerings, as well as wholesale international long distance traffic termination. The Telecom Platform Services segment markets and distributes multiple communications and payment services across four businesses: Retail Communications, Wholesale Carrier Services, Payment Services and Hosted Platform Solutions. The Company’s Consumer Phone Services segment provides consumer local and long distance services in certain states of the United States. The Telecom Platform Services and Consumer Phone Services segments comprise the Company’s IDT Telecom division. The All Other segment includes its real estate holdings and other smaller businesses.

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