Head to Head Comparison: Shenandoah Telecommunications (SHEN) versus Otelco (OTT)

Otelco (NASDAQ: OTT) and Shenandoah Telecommunications (NASDAQ:SHEN) are both small-cap wired telecommunications carriers companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, dividends and valuation.

Valuation & Earnings

This table compares Otelco and Shenandoah Telecommunications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Otelco N/A N/A N/A ($9.59) -0.57
Shenandoah Telecommunications $535.29 million 3.26 -$890,000.00 $0.12 295.00

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Otelco and Shenandoah Telecommunications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Otelco 0 0 0 0 N/A
Shenandoah Telecommunications 0 0 1 0 3.00

Shenandoah Telecommunications has a consensus price target of $35.00, suggesting a potential downside of 1.13%. Given Shenandoah Telecommunications’ higher possible upside, analysts plainly believe Shenandoah Telecommunications is more favorable than Otelco.

Volatility & Risk

Otelco has a beta of 0.33, indicating that its share price is 67% less volatile than the S&P 500. Comparatively, Shenandoah Telecommunications has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Institutional and Insider Ownership

52.6% of Shenandoah Telecommunications shares are held by institutional investors. 7.2% of Shenandoah Telecommunications shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Otelco and Shenandoah Telecommunications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Otelco N/A N/A N/A
Shenandoah Telecommunications 0.91% 4.04% 0.83%

Dividends

Shenandoah Telecommunications pays an annual dividend of $0.26 per share and has a dividend yield of 0.7%. Otelco does not pay a dividend. Shenandoah Telecommunications pays out 216.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Shenandoah Telecommunications beats Otelco on 11 of the 12 factors compared between the two stocks.

Otelco Company Profile

Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis. These services include local and long distance calling; network access to and from its customers; data transport; digital high-speed and dial-up Internet access; cable, satellite and Internet protocol television; wireless, and other telephone related services. The principal markets for these services are residential and business customers residing in and adjacent to the exchanges the Company serves in Alabama, Massachusetts, Maine, Missouri, Vermont and West Virginia. In addition, the Company serves business customers throughout Maine and New Hampshire and provides dial-up Internet service throughout the states of Maine and Missouri. In January 2014, the Company acquired Reliable Networks, a provider of cloud hosting and managed services for companies who rely on mission-critical applications.

Shenandoah Telecommunications Company Profile

Shenandoah Telecommunications Company is a telecommunications holding company. The Company’s segments are Wireless, Cable, Wireline and Other. The Company, through its operating subsidiaries, provides both regulated and unregulated telecommunications services to end user customers and other telecommunications providers in Virginia, West Virginia, central Pennsylvania, western Maryland, and portions of Kentucky and Ohio. The business of the Wireless segment is conducted principally by the Company’s subsidiary, Shenandoah Personal Communications, LLC (PCS). The business of the Company’s Cable segment is conducted through Shenandoah Cable Television, LLC (Shenandoah Cable). The Wireline segment provides regulated and unregulated voice services, digital subscriber line (DSL) Internet access, cable modem and long distance access services throughout Shenandoah County and portions of Rockingham, Frederick, Warren and Augusta counties, Virginia.

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