Comparing Telefonica Brasil (VIV) and BCE (BCE)

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

Profitability

This table compares Telefonica Brasil and BCE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telefonica Brasil 9.41% 5.91% 3.97%
BCE 12.85% 21.08% 5.78%

Volatility and Risk

Telefonica Brasil has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, BCE has a beta of 0.35, suggesting that its stock price is 65% less volatile than the S&P 500.

Valuation and Earnings

This table compares Telefonica Brasil and BCE’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Telefonica Brasil $13.46 billion 1.99 $4.42 billion $0.74 21.45
BCE $18.26 billion 2.31 $6.84 billion $2.44 19.19

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

Institutional and Insider Ownership

10.0% of Telefonica Brasil shares are owned by institutional investors. Comparatively, 42.7% of BCE shares are owned by institutional investors. 0.2% of BCE 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.

Dividends

Telefonica Brasil pays an annual dividend of $0.55 per share and has a dividend yield of 3.5%. BCE pays an annual dividend of $2.28 per share and has a dividend yield of 4.9%. Telefonica Brasil pays out 74.3% of its earnings in the form of a dividend. BCE pays out 93.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BCE has increased its dividend for 4 consecutive years. BCE is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Telefonica Brasil and BCE, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telefonica Brasil 0 2 1 0 2.33
BCE 0 5 4 0 2.44

Telefonica Brasil currently has a consensus target price of $15.00, suggesting a potential downside of 5.48%. BCE has a consensus target price of $57.80, suggesting a potential upside of 23.45%. Given BCE’s stronger consensus rating and higher possible upside, analysts clearly believe BCE is more favorable than Telefonica Brasil.

Summary

BCE beats Telefonica Brasil on 14 of the 17 factors compared between the two stocks.

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.

BCE Company Profile

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.

Receive News & Ratings for Telefonica Brasil S.A. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Telefonica Brasil S.A. and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply