Contrasting GTT Communications (GTT) & Telefonica Brasil (VIV)

GTT Communications (NYSE: VIV) and Telefonica Brasil (NYSE:VIV) are both computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Analyst Ratings

This is a breakdown of recent recommendations for GTT Communications and Telefonica Brasil, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
GTT Communications 1 1 7 0 2.67
Telefonica Brasil 1 5 3 0 2.22

GTT Communications presently has a consensus price target of $51.63, indicating a potential upside of 24.40%. Telefonica Brasil has a consensus price target of $14.88, indicating a potential upside of 52.72%. Given Telefonica Brasil’s higher possible upside, analysts plainly believe Telefonica Brasil is more favorable than GTT Communications.

Profitability

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

Net Margins Return on Equity Return on Assets
GTT Communications -21.82% -45.46% -5.45%
Telefonica Brasil 15.70% 9.70% 6.63%

Institutional & Insider Ownership

76.1% of GTT Communications shares are owned by institutional investors. Comparatively, 10.0% of Telefonica Brasil shares are owned by institutional investors. 23.0% of GTT Communications shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Telefonica Brasil pays an annual dividend of $0.38 per share and has a dividend yield of 3.9%. GTT Communications does not pay a dividend. Telefonica Brasil pays out 44.7% of its earnings in the form of a dividend. Telefonica Brasil has raised its dividend for 5 consecutive years.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
GTT Communications $827.90 million 2.74 -$71.50 million $0.24 172.92
Telefonica Brasil $13.54 billion 1.21 $1.44 billion $0.85 11.46

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

Risk and Volatility

GTT Communications has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500. Comparatively, Telefonica Brasil has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500.

Summary

Telefonica Brasil beats GTT Communications on 10 of the 17 factors compared between the two stocks.

About GTT Communications

GTT Communications, Inc. provides cloud networking services to multinational enterprises, carriers, and government customers worldwide. The company provides private, public, and hybrid cloud network solutions; high bandwidth-Internet connectivity and IP transit, as well as broadband and wireless access services; managed equipment and security services; and voice and unified communications services consisting of SIP trunking and enterprise PBX services. It also offers video transport services for the transmission of live events, sport, entertainment, and news to broadcasters and cable programming providers; and network access services. The company's IP network consists of approximately 600 points of presence. GTT Communications, Inc. markets its products and services through a network of direct sales force and indirect sales channels. The company was formerly known as Global Telecom & Technology, Inc. and changed its name to GTT Communications, Inc. in January 2014. GTT Communications, Inc. was founded in 2005 and is headquartered in McLean, Virginia.

About Telefonica Brasil

Telefônica Brasil S.A. provides mobile and fixed line telecommunications services to residential and corporate customers in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband Internet access through 3G and 4G, as well as mobile value-added services and wireless roaming services. The company also offers data services, including broadband and mobile data services. In addition, it provides pay TV services through direct to home satellite technology, IPTV, and cable, as well as pay-per-view and video on demand services; network services, such as rental of facilities; other services comprising Internet access, private network connectivity, computer equipment leasing, extended service, detects, voice mail and cellular blocker, and others; wholesale services, including interconnection services to users of other network providers; and digital services in the field of financial services, machine-to-machine operations, e-health solutions, security, education, insurance, entertainment, and mobile advertising. Further, the company offers multimedia communication services, which include audio, data, voice and other sounds, images, texts, and other information, as well as sells devices, such as handsets, smartphones, broadband USB modems, and devices. Additionally, it provides telecommunications solutions and IT support to various industries, such as retail, manufacturing, services, financial institutions, government, etc. Telefônica Brasil S.A. offers its solutions through its stores, dealers, retail and distribution channels, and door-to-door sales. The company was formerly known as Telecomunicações de São Paulo S.A. ? TELESP and changed its name to Telefônica Brasil S.A. in October 2011. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil. Telefônica Brasil S.A. is a subsidiary of SP Telecomunicações Participações Ltda.

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