Contrasting TELE2 AB/ADR (TLTZY) and Verizon Communications (VZ)

TELE2 AB/ADR (OTCMKTS: TLTZY) and Verizon Communications (NYSE:VZ) are both utilities companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Dividends

TELE2 AB/ADR pays an annual dividend of $0.16 per share and has a dividend yield of 2.5%. Verizon Communications pays an annual dividend of $2.36 per share and has a dividend yield of 4.7%. TELE2 AB/ADR pays out 55.2% of its earnings in the form of a dividend. Verizon Communications pays out 63.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Verizon Communications has raised its dividend for 11 consecutive years. Verizon Communications is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

63.7% of Verizon Communications shares are owned by institutional investors. 0.1% of Verizon Communications shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings for TELE2 AB/ADR and Verizon Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TELE2 AB/ADR 0 0 0 0 N/A
Verizon Communications 0 6 16 0 2.73

Verizon Communications has a consensus target price of $54.67, indicating a potential upside of 9.86%. Given Verizon Communications’ higher probable upside, analysts clearly believe Verizon Communications is more favorable than TELE2 AB/ADR.

Risk and Volatility

TELE2 AB/ADR has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Verizon Communications has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.

Profitability

This table compares TELE2 AB/ADR and Verizon Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TELE2 AB/ADR 1.69% 16.04% 6.90%
Verizon Communications 24.37% 42.62% 6.30%

Valuation & Earnings

This table compares TELE2 AB/ADR and Verizon Communications’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TELE2 AB/ADR $2.94 billion 2.16 $49.85 million $0.29 21.76
Verizon Communications $126.03 billion 1.63 $30.10 billion $3.74 13.30

Verizon Communications has higher revenue and earnings than TELE2 AB/ADR. Verizon Communications is trading at a lower price-to-earnings ratio than TELE2 AB/ADR, indicating that it is currently the more affordable of the two stocks.

Summary

Verizon Communications beats TELE2 AB/ADR on 11 of the 16 factors compared between the two stocks.

TELE2 AB/ADR Company Profile

Tele2 AB (publ), a telecom operator, provides telecommunication services for residential and business customers. The company offers mobile voice telephony, handset data, messaging, and value-added services, such as handset insurance, antivirus, and content services; mobile broadband services; and fixed voice and broadband, TV, and fixed and mobile telephony services. It also provides business-to-business telecommunication services, such as secure and encrypted connections, company-specific mobile network access points, etc.; cloud services comprising voice switching, data center services, business productivity solutions, etc.; and data connectivity, Ethernet connectivity, VPN services, and international IP connectivity services, as well as IoT solutions. As of March 22, 2017, the company served approximately 17 million customers in 9 countries, including Sweden, Lithuania, Latvia, Estonia, the Netherlands, Kazakhstan, Croatia, Austria, and Germany, as well as internationally. Tele2 AB (publ) was founded in 1990 and is headquartered in Stockholm, Sweden.

Verizon Communications Company Profile

Verizon Communications Inc., through its subsidiaries, offers communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The company's Wireless segment provides wireless voice and data services; Internet access on various notebook computers and tablets; multimedia, business-focused, and location-based services, as well as international travel services; and network access services to deliver various Internet of Things products and services. This segment also provides wireless devices, including smartphones and basic phones, wearables, and tablets and other Internet access devices. As of December 31, 2017, it had 116.3 million retail connections. Its Wireline segment offers traditional circuit-based network products and services; networking solutions, comprising private Internet protocol (IP), Ethernet, and software-defined wide area network, as well as cyber security services; local exchange, regional, long distance, and toll-free calling services; voice messaging and conferencing services; and workforce productivity and customer contact center solutions, as well as residential fixed connectivity solutions, including Internet, TV, and voice services under the Fios brand name. This segment also provides premises equipment, as well as installation, maintenance, and site services; data, voice, local dial tone, and broadband services primarily to local, long distance, and wireless carriers; voice and networking products, Fios services, IP networking, voice solutions, security, and managed information technology services for small and medium businesses, state and local governments, and educational institutions; and security and managed network services. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was founded in 1983 and is headquartered in New York, New York.

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