Rostelecom OJSC (ROSYY) vs. Verizon Communications (VZ) Financial Analysis

Verizon Communications (NYSE:VZ) and Rostelecom OJSC (OTCMKTS:ROSYY) are both computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, profitability, dividends, valuation, analyst recommendations, risk and earnings.

Institutional and Insider Ownership

64.8% of Verizon Communications shares are held by institutional investors. Comparatively, 0.0% of Rostelecom OJSC shares are held by institutional investors. 0.1% of Verizon Communications shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Verizon Communications pays an annual dividend of $2.41 per share and has a dividend yield of 4.2%. Rostelecom OJSC pays an annual dividend of $0.56 per share and has a dividend yield of 8.9%. Verizon Communications pays out 64.4% of its earnings in the form of a dividend. Verizon Communications has raised its dividend for 12 consecutive years.

Earnings and Valuation

This table compares Verizon Communications and Rostelecom OJSC’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Verizon Communications $126.03 billion 1.87 $30.10 billion $3.74 15.26
Rostelecom OJSC $5.24 billion 0.51 $234.21 million N/A N/A

Verizon Communications has higher revenue and earnings than Rostelecom OJSC.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Verizon Communications and Rostelecom OJSC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Verizon Communications 0 9 12 0 2.57
Rostelecom OJSC 0 0 0 0 N/A

Verizon Communications presently has a consensus target price of $55.93, indicating a potential downside of 2.03%. Given Verizon Communications’ higher possible upside, research analysts plainly believe Verizon Communications is more favorable than Rostelecom OJSC.

Profitability

This table compares Verizon Communications and Rostelecom OJSC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Verizon Communications 24.71% 35.50% 6.98%
Rostelecom OJSC 4.69% 5.90% 2.52%

Volatility & Risk

Verizon Communications has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500. Comparatively, Rostelecom OJSC has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.

Summary

Verizon Communications beats Rostelecom OJSC on 12 of the 15 factors compared between the two stocks.

About Verizon Communications

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.

About Rostelecom OJSC

Public Joint Stock Company Long-Distance and International Telecommunications Rostelecom provides telecommunications services in Russia and Europe. The company offers communication services, such as local, intra-zone, long-distance domestic and international fixed-line telephone, and mobile services, as well as data transmission, Internet, Pay TV, VPN, data center, and radio communication services; and rents communication channels. It operates the intercity network and the international telecommunications gateways of Russia, which carry voice and data traffic that originates in owned, and other national and international operators' networks to national and international operators for termination. The company also operates government programs, including e-Government, unified communication service, and others, as well as offers solutions in the fields of cloud computing, medicine, education, security, and housing and utility services. In addition, it manufactures communication equipment; and provides repair and maintenance, engineering design, recreational, IT consulting, and data storage services. The company serves approximately 13 million broadband subscribers, approximately 10.1 million pay-TV subscribers, and 5.1 million IPTV subscribers, including households, businesses, and governments. The company was founded in 1993 and is headquartered in Moscow, Russia.

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