Financial Analysis: Altice USA (ATUS) versus Viacom, Inc. Class B (VIAB)

Altice USA (NYSE: ATUS) and Viacom, Inc. Class B (NASDAQ:VIAB) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.

Dividends

Viacom, Inc. Class B pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. Altice USA does not pay a dividend. Viacom, Inc. Class B pays out 21.2% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Altice USA and Viacom, Inc. Class B’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Altice USA $9.33 billion 1.39 $1.52 billion $0.02 880.00
Viacom, Inc. Class B $13.26 billion 0.89 $1.87 billion $3.77 7.80

Viacom, Inc. Class B has higher revenue and earnings than Altice USA. Viacom, Inc. Class B is trading at a lower price-to-earnings ratio than Altice USA, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Altice USA and Viacom, Inc. Class B’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Altice USA 15.69% -6.78% -0.82%
Viacom, Inc. Class B 16.74% 24.97% 6.76%

Analyst Ratings

This is a summary of recent ratings for Altice USA and Viacom, Inc. Class B, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Altice USA 0 4 16 1 2.86
Viacom, Inc. Class B 3 18 6 0 2.11

Altice USA presently has a consensus price target of $28.14, indicating a potential upside of 59.86%. Viacom, Inc. Class B has a consensus price target of $34.22, indicating a potential upside of 16.35%. Given Altice USA’s stronger consensus rating and higher probable upside, research analysts clearly believe Altice USA is more favorable than Viacom, Inc. Class B.

Insider & Institutional Ownership

17.0% of Altice USA shares are held by institutional investors. Comparatively, 78.0% of Viacom, Inc. Class B shares are held by institutional investors. 2.0% of Altice USA shares are held by company insiders. Comparatively, 1.3% of Viacom, Inc. Class B 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.

Summary

Viacom, Inc. Class B beats Altice USA on 8 of the 15 factors compared between the two stocks.

About Altice USA

Altice USA, Inc., together with its subsidiaries, provides broadband communications and video services in the United States. The company operates in two segments, Cablevision and Cequel. It delivers broadband, pay television, telephony services, Wi-Fi hotspot access, proprietary content, and advertising services to approximately 4.9 million residential and business customers. The company also offers wireless routers and Internet security software; and pay television services, which include delivery of broadcast stations and cable networks, and advanced digital pay television services, such as video-on-demand, high-definition channels, digital video recorder, and pay-per-view. In addition, it provides Ethernet, data transport, IP-based virtual private networks, Internet access, and telephony services; hosted telephony, managed Wi-Fi, managed desktop and server backup services; managed collaboration services, including audio and Web conferencing; managed services, including business e-mail, hosted private branch exchange, Web space storage, and network security monitoring; data-driven television, digital, and other multi-platform advertising services; and data-driven and audience-based advertising solutions. Further, the company operates local news channels, as well as traffic and weather channels; News12.com, a destination for local news on the Web; and News 12 To Go, a mobile app for phones and tablets. Altice USA, Inc. is headquartered in Long Island City, New York. Altice Europe N.V. was previously known as Altice USA, Inc. As a result of its separation from Altice N.V., Altice Europe N.V. changed its name. Altice Europe N.V. operates independently of Altice N.V. as of June 8, 2018.

About Viacom, Inc. Class B

Viacom, Inc. operates media brands that create entertainment content worldwide. The company creates television programs, motion pictures, short-form content, games, consumer products, podcasts, live events, and social media experiences. It operates through two segments, Media Networks and Filmed Entertainment. The Media Networks segment provides entertainment content and related branded products for consumers through approximately 300 locally programmed and operated TV channels, including Nickelodeon, Nick Jr., MTV, BET, Comedy Central, SPIKE, VH1, TV Land, CMT, Logo, Channel 5, Telefe, Colors, Paramount Channel, TeenNick, Nicktoons, Nick Music, MTV2, MTV Classic, MTV Live, BET Her, BET Gospel, and BET Hip Hop, as well as through online, mobile, and apps. The Filmed Entertainment segment produces, finances, acquires, and distributes motion pictures, television programming, and other entertainment content under the Paramount Pictures, Paramount Players, Paramount Animation, Paramount Television, Nickelodeon Movies, and MTV Films brands. This segment exhibits motion pictures theatrically through home entertainment, licensing to television and digital platforms, and ancillary activities. The company releases its content through DVDs, Blu-ray discs, transactional video-on-demand, subscription video-on-demand, pay television, cable television, free television, and free video-on-demand, as well as airlines and hotels. Viacom, Inc. is headquartered in New York, New York.

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