Head-To-Head Analysis: Telefonica Brasil (VIV) & Neustar (NSR)

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

Institutional and Insider Ownership

9.3% of Telefonica Brasil shares are held by institutional investors. Comparatively, 88.8% of Neustar shares are held by institutional investors. 2.9% of Neustar shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Telefonica Brasil and Neustar, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telefonica Brasil 0 3 1 0 2.25
Neustar 0 1 0 0 2.00

Telefonica Brasil currently has a consensus target price of $16.03, indicating a potential upside of 1.99%. Neustar has a consensus target price of $29.00, indicating a potential upside of Infinity. Given Neustar’s higher possible upside, analysts clearly believe Neustar is more favorable than Telefonica Brasil.

Profitability

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

Net Margins Return on Equity Return on Assets
Telefonica Brasil 10.00% 6.29% 4.23%
Neustar 15.50% 19.28% 8.80%

Valuation & Earnings

This table compares Telefonica Brasil and Neustar’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telefonica Brasil $12.25 billion 2.17 $1.17 billion $0.80 19.65
Neustar N/A N/A N/A $3.27 N/A

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

Dividends

Telefonica Brasil pays an annual dividend of $0.95 per share and has a dividend yield of 6.0%. Neustar does not pay a dividend. Telefonica Brasil pays out 118.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Neustar has raised its dividend for 5 consecutive years.

Summary

Neustar beats Telefonica Brasil on 9 of the 14 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.

Neustar Company Profile

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

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