Contrasting TalkTalk Telecom Group (TKTCY) and Verizon Communications (VZ)

TalkTalk Telecom Group (OTCMKTS:TKTCY) and Verizon Communications (NYSE:VZ) are both utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their valuation, dividends, profitability, earnings, risk, analyst recommendations and institutional ownership.

Profitability

This table compares TalkTalk Telecom Group and Verizon Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TalkTalk Telecom Group N/A N/A N/A
Verizon Communications 24.71% 35.50% 6.98%

Risk and Volatility

TalkTalk Telecom Group has a beta of 0.53, indicating that its stock price is 47% less volatile than the S&P 500. Comparatively, Verizon Communications has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for TalkTalk Telecom Group and Verizon Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TalkTalk Telecom Group 0 0 1 0 3.00
Verizon Communications 0 6 16 0 2.73

Verizon Communications has a consensus price target of $55.84, suggesting a potential downside of 4.48%. Given Verizon Communications’ higher probable upside, analysts plainly believe Verizon Communications is more favorable than TalkTalk Telecom Group.

Institutional and Insider Ownership

64.3% 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 large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

TalkTalk Telecom Group pays an annual dividend of $0.17 per share and has a dividend yield of 1.4%. Verizon Communications pays an annual dividend of $2.41 per share and has a dividend yield of 4.1%. TalkTalk Telecom Group pays out 141.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Verizon Communications pays out 64.4% of its earnings in the form of a dividend. Verizon Communications has increased 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.

Valuation & Earnings

This table compares TalkTalk Telecom Group and Verizon Communications’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TalkTalk Telecom Group $2.27 billion 1.05 -$104.80 million $0.12 104.17
Verizon Communications $126.03 billion 1.91 $30.10 billion $3.74 15.63

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

Summary

Verizon Communications beats TalkTalk Telecom Group on 14 of the 16 factors compared between the two stocks.

TalkTalk Telecom Group Company Profile

TalkTalk Telecom Group PLC provides fixed line, TV, and mobile telecommunications services. It offers landline, broadband, fiber, TV, and mobile services, including fixed price plans and unlimited broadband usage, as well as HomeSafe, a network-based security and filtering system. The company also provides various business-grade communications products and services, including Internet access, data, voice, and mobile. TalkTalk Telecom Group PLC was founded in 2002 and is based in London, the United Kingdom.

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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