Telecom Argentina (TEO) and Orange (ORAN) Head-To-Head Analysis

Orange (NYSE: ORAN) and Telecom Argentina (NYSE:TEO) are both mid-cap computer and technology companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Institutional and Insider Ownership

1.2% of Orange shares are held by institutional investors. Comparatively, 6.0% of Telecom Argentina shares are held by institutional investors. 1.0% of Telecom Argentina shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Orange pays an annual dividend of $0.52 per share and has a dividend yield of 3.0%. Telecom Argentina pays an annual dividend of $1.14 per share and has a dividend yield of 2.9%. Telecom Argentina pays out 50.0% of its earnings in the form of a dividend. Orange has increased its dividend for 2 consecutive years. Orange is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Orange has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Telecom Argentina has a beta of 1.49, indicating that its share price is 49% more volatile than the S&P 500.

Profitability

This table compares Orange and Telecom Argentina’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Orange N/A N/A N/A
Telecom Argentina 11.60% 31.15% 13.69%

Analyst Ratings

This is a breakdown of current ratings and target prices for Orange and Telecom Argentina, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Orange 1 1 3 0 2.40
Telecom Argentina 0 1 2 0 2.67

Telecom Argentina has a consensus target price of $34.67, indicating a potential downside of 10.58%. Given Telecom Argentina’s stronger consensus rating and higher probable upside, analysts clearly believe Telecom Argentina is more favorable than Orange.

Valuation and Earnings

This table compares Orange and Telecom Argentina’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Orange $45.29 billion 1.03 $3.25 billion N/A N/A
Telecom Argentina $3.62 billion 2.08 $269.10 million $2.28 17.00

Orange has higher revenue and earnings than Telecom Argentina.

Summary

Telecom Argentina beats Orange on 9 of the 15 factors compared between the two stocks.

Orange Company Profile

Orange SA is a telecommunications operator. The Company also provides telecommunication services to multinational companies, under the brand Orange Business Services. The Company’s segments include France, Spain, Poland, Belgium and Luxembourg, Central European countries, Africa and Middle East, Enterprise, and International Carriers & Shared Services. The Company provides consumers, businesses and other telecommunications operators with a range of services, including fixed telephony and mobile telecommunications, data transmission and other value-added services, mainly in Europe, Africa and the Middle East. The Company offers fixed-line telephony, mobile telephony and Internet services in France. The Company offers fixed-line telephony, mobile telephony and Internet services in Spain. The Company offers fixed-line and mobile telephony, and Internet services in Poland. The Company operates through Mobistar and Groupama Banque SA.

Telecom Argentina Company Profile

Telecom Argentina S.A. provides fixed-line telecommunications services in Argentina, and also provides other telephone-related services, such as international long-distance service, data transmission, information technology solutions outsourcing and Internet services. The Company’s segments include Fixed Telecommunications Services (Fixed Services), Personal Mobile Telecommunications Services (Personal Mobile Services) and Nucleo Mobile Telecommunications Services (Nucleo Mobile Services). The Company, through its subsidiaries, also provides mobile telecommunications services and international wholesale services. The Fixed services segment consists of basic telephone services, interconnection services, data transmission and Internet services, information and communication technology services, and other telephone services. The Company, through its subsidiaries, such as Telecom Personal S.A. and Nucleo S.A., provides mobile services in Argentina and Paraguay, respectively.

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