Contrasting FairPoint Communications (FRP) & Telecom Italia (TI)

FairPoint Communications (NASDAQ: FRP) and Telecom Italia (NYSE:TI) are both telecommunications services companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.

Risk and Volatility

FairPoint Communications has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Telecom Italia has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for FairPoint Communications and Telecom Italia, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FairPoint Communications 0 1 0 0 2.00
Telecom Italia 1 2 1 0 2.00

FairPoint Communications currently has a consensus target price of $17.00, suggesting a potential upside of Infinity. Telecom Italia has a consensus target price of $1.80, suggesting a potential downside of 78.80%. Given FairPoint Communications’ higher possible upside, equities research analysts plainly believe FairPoint Communications is more favorable than Telecom Italia.

Institutional and Insider Ownership

88.6% of FairPoint Communications shares are held by institutional investors. Comparatively, 0.8% of Telecom Italia shares are held by institutional investors. 7.6% of FairPoint Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares FairPoint Communications and Telecom Italia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FairPoint Communications -11.81% N/A -7.88%
Telecom Italia N/A N/A N/A

Earnings and Valuation

This table compares FairPoint Communications and Telecom Italia’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
FairPoint Communications N/A N/A N/A $2.27 N/A
Telecom Italia $21.06 billion 0.86 $2.00 billion N/A N/A

Telecom Italia has higher revenue and earnings than FairPoint Communications.

Summary

Telecom Italia beats FairPoint Communications on 5 of the 8 factors compared between the two stocks.

About FairPoint Communications

FairPoint Communications, Inc. is a provider of data, voice and communications services to business, wholesale and residential customers within its service territories. The Company offers its customers a suite of services, such as Ethernet, Session Initiation Protocol Trunking (SIP-Trunking), hosted Primary Branch Exchange (hosted PBX), managed services, data center colocation services, high capacity data transport and other Internet protocol (IP)-based services over its fiber-based network. It also offers Internet access, high-speed data, and local and long distance voice services. It provides services, such as Data and Internet Services, which include optical, Ethernet, Ethernet virtual circuit technology for cellular backhaul and private line special access services. It offers Voice Services, which include Local Calling Services, Long Distance Services and 9-1-1 Services. It also offers Network Transport Services, Interstate Access Charges and Intrastate Access Charges.

About Telecom Italia

Telecom Italia S.p.A. (Telecom Italia) operates fixed voice and data infrastructure in Italy, and provides mobile network platforms. The Company focuses on various areas of digital services, including Enriched Communication, Trusted Digital Life, Business Life, Indoor Life, Mobile Open Life and Digital Entertainment. Its segments include Consumer, Business, National Wholesale and Other. It is engaged in developing various projects in areas, including Smart Green, Social Reading, Solutions for good schooling, Digital tourism 2.0, Smart Home, FriendTV and Big Data. Smart Green is the assessment of projects connected with the environment and potential partnerships with the local government offices for the monitoring of air in public offices and urban areas, using networks of sensors connected to the Company’s Cloud. The Company is involved, either alone or in partnership with external partners, in devising and developing healthcare services at national, regional and local level.

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