Critical Analysis: Black Box (BBOX) vs. OI (OIBR)

Black Box (NASDAQ: BBOX) and OI (NYSE:OIBR) are both small-cap telecommunications services companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Black Box and OI, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Black Box 0 1 0 0 2.00
OI 0 0 0 0 N/A

Black Box currently has a consensus target price of $10.00, suggesting a potential upside of 325.53%. Given Black Box’s higher probable upside, equities research analysts clearly believe Black Box is more favorable than OI.

Profitability

This table compares Black Box and OI’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Black Box -6.44% -9.54% -2.82%
OI -24.34% -49.64% -7.06%

Valuation & Earnings

This table compares Black Box and OI’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Black Box $855.70 million 0.04 -$7.05 million ($3.37) -0.70
OI N/A N/A N/A ($3.23) -0.30

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

Risk & Volatility

Black Box has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, OI has a beta of 1.91, meaning that its stock price is 91% more volatile than the S&P 500.

Dividends

Black Box pays an annual dividend of $0.24 per share and has a dividend yield of 10.2%. OI does not pay a dividend. Black Box pays out -7.1% of its earnings in the form of a dividend.

Institutional and Insider Ownership

74.5% of Black Box shares are owned by institutional investors. 3.7% of Black Box shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Black Box beats OI on 9 of the 12 factors compared between the two stocks.

Black Box Company Profile

Black Box Corporation is a technology solutions provider. The Company is engaged in designing, building, managing and securing the information technology (IT) infrastructure. Offerings under the Company’s Products platform include IT infrastructure, specialty networking, multimedia and keyboard/video/mouse (KVM) switching. Offerings under its Services platform include unified communications, data infrastructure and managed services. It conducts business globally and manages its business on a geographic-service type basis consisting of four segments: North America Products, North America Services, International Products and International Services. The offerings of its Products platform are distributed through value-added resellers, direct marketing manufacturers, mass merchandisers, Web retailers and others. The offerings of its Services platform are distributed through value-added resellers, manufacturers and large system integrators, among others.

OI Company Profile

Oi S.A. is an integrated telecommunications service provider in Brazil. The Company is a switched fixed-line telephony services (STFC) concessionaire. It is engaged in the provision of STFC as a local and intraregional long-distance carrier. Its segments include Residential Services, Personal Mobility, and SMEs/Corporate. It offers a range of integrated telecommunications services that include fixed and mobile, broadband, pay television (TV), data transmission and Internet provider services. The Company’s Residential Services segment is focused on the sale of fixed telephony services, including voice services, data communication services (broadband), and pay TV. The Personal Mobility segment is focused on the sale of mobile telephony services to subscription and prepaid customers, and mobile broadband customer. The SMEs/Corporate segment includes corporate solutions offered to its small, medium-sized, and large corporate customers.

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