Financial Review: Liberty Broadband (LBRDK) versus Charter Communications (CHTR)

Liberty Broadband (NASDAQ: LBRDK) and Charter Communications (NASDAQ:CHTR) are both large-cap consumer discretionary companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, earnings, dividends, profitability, valuation and risk.

Analyst Ratings

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This is a breakdown of recent recommendations and price targets for Liberty Broadband and Charter Communications, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Liberty Broadband 0 1 0 0 2.00
Charter Communications 1 6 15 0 2.64

Liberty Broadband currently has a consensus target price of $95.00, indicating a potential upside of 16.56%. Charter Communications has a consensus target price of $408.18, indicating a potential upside of 33.43%. Given Charter Communications’ stronger consensus rating and higher possible upside, analysts clearly believe Charter Communications is more favorable than Liberty Broadband.

Earnings and Valuation

This table compares Liberty Broadband and Charter Communications’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Liberty Broadband $13.09 million 1,129.05 $2.03 billion $6.00 13.58
Charter Communications $41.58 billion 1.75 $9.90 billion $2.65 115.44

Charter Communications has higher revenue and earnings than Liberty Broadband. Liberty Broadband is trading at a lower price-to-earnings ratio than Charter Communications, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

54.6% of Liberty Broadband shares are held by institutional investors. Comparatively, 72.3% of Charter Communications shares are held by institutional investors. 10.8% of Liberty Broadband shares are held by insiders. Comparatively, 0.8% of Charter Communications shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Liberty Broadband and Charter Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Liberty Broadband 15,532.30% 22.65% 20.03%
Charter Communications 23.80% 1.11% 0.35%

Volatility and Risk

Liberty Broadband has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500. Comparatively, Charter Communications has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.

About Liberty Broadband

Liberty Broadband Corp. operates as a holding company, which engages in cable services and wireless telecommunications businesses. It operates through its subsidiaries, Charter Communications, Inc and TruePosition, Inc. The company was founded on November 4, 2014 is headquartered on Englewood, CO.

About Charter Communications

Charter Communications, Inc., through its subsidiaries, provides cable services to residential and commercial customers in the United States. It offers subscription-based video services, including video on demand, high definition television, digital video recorder, pay-per-view, spectrum guide services, and a package of basic video programming, as well as ad-supported free online video products. The company also provides Internet services, such as security suite that protects computers from viruses and spyware; in-home WiFi, which permits customers to lease high performance wireless routers to enhance their in-home wireless Internet experience; out-of-home WiFi; parental control features; and residential Internet services. In addition, it offers voice communications services using voice over Internet protocol technology; and broadband communications solutions, such as Internet access, data networking, fiber connectivity, video entertainment, and business telephone services to cellular towers and office buildings for business and carrier organizations. Further, the company provides video programming and music, Web hosting, email and security, and multi-line telephone services, as well as Web-based service management; and sells video and online advertising inventory to local, regional, and national advertising customers. Additionally, it offers fiber-delivered communications and managed information technology solutions; and security and home management services, as well as owns and operates regional sports networks and local sports, news, and lifestyle channels. As of December 31, 2017, the company served approximately 27.2 million residential and business customers. Charter Communications, Inc. was founded in 1999 and is based in Stamford, Connecticut.

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