Analyzing Telefonica Brasil (VIV) and Bandwidth (BAND)

Telefonica Brasil (NYSE: VIV) and Bandwidth (NASDAQ:BAND) are both telecommunications services companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, analyst recommendations, institutional ownership, risk, valuation, earnings and profitability.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Telefonica Brasil and Bandwidth, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telefonica Brasil 0 4 1 0 2.20
Bandwidth 0 0 5 0 3.00

Telefonica Brasil presently has a consensus price target of $16.03, suggesting a potential downside of 2.53%. Bandwidth has a consensus price target of $29.80, suggesting a potential upside of 33.69%. Given Bandwidth’s stronger consensus rating and higher probable upside, analysts plainly believe Bandwidth is more favorable than Telefonica Brasil.

Insider and Institutional Ownership

9.5% of Telefonica Brasil shares are owned by institutional investors. Comparatively, 6.5% of Bandwidth shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Telefonica Brasil and Bandwidth’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telefonica Brasil $12.25 billion 2.27 $1.17 billion $0.79 20.82
Bandwidth $152.13 million 2.58 $22.35 million N/A N/A

Telefonica Brasil has higher revenue and earnings than Bandwidth.

Profitability

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

Net Margins Return on Equity Return on Assets
Telefonica Brasil 11.23% 7.10% 4.75%
Bandwidth N/A N/A N/A

Dividends

Telefonica Brasil pays an annual dividend of $0.95 per share and has a dividend yield of 5.8%. Bandwidth does not pay a dividend. Telefonica Brasil pays out 120.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Bandwidth has raised its dividend for 5 consecutive years.

Summary

Telefonica Brasil beats Bandwidth on 7 of the 13 factors compared between the two stocks.

About Telefonica Brasil

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.

About Bandwidth

Bandwidth Inc., formerly Bandwidth.com, Inc., is a cloud-based communications platform-as-a-service provider (CPaaS) that enables enterprises to create, scale and operate voice or text communications services across any mobile application or connected device or enterprises. The Company has two operating and reportable segments, CPaaS and Other. The Company’s solutions include a broad range of software APIs for voice and text functionality and IP voice network. The Company’s sophisticated and easy-to-use software APIs allow enterprises to enhance their products and services by incorporating advanced voice and text capabilities. The Company offers advanced monitoring, reporting and analytics, superior customer service, dedicated operating teams, and personalized support.

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