Telefonica Brasil SA (NYSE: VIV) and Shaw Communications (NYSE:SJR) are both large-cap telecommunications services companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, valuation, institutional ownership, earnings and dividends.
This table compares Telefonica Brasil SA and Shaw Communications’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Telefonica Brasil SA||8.16%||5.06%||3.37%|
Valuation and Earnings
This table compares Telefonica Brasil SA and Shaw Communications’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Telefonica Brasil SA||$13.46 billion||2.01||$4.42 billion||$0.74||21.70|
|Shaw Communications||$4.31 billion||2.52||$1.72 billion||$0.80||27.49|
Telefonica Brasil SA has higher revenue and earnings than Shaw Communications. Telefonica Brasil SA is trading at a lower price-to-earnings ratio than Shaw Communications, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Telefonica Brasil SA has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500. Comparatively, Shaw Communications has a beta of 0.91, meaning that its stock price is 9% less volatile than the S&P 500.
This is a summary of recent ratings for Telefonica Brasil SA and Shaw Communications, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Telefonica Brasil SA||0||2||2||0||2.50|
Telefonica Brasil SA presently has a consensus price target of $15.67, indicating a potential downside of 2.45%. Shaw Communications has a consensus price target of $27.33, indicating a potential upside of 24.30%. Given Shaw Communications’ higher probable upside, analysts clearly believe Shaw Communications is more favorable than Telefonica Brasil SA.
Telefonica Brasil SA pays an annual dividend of $0.60 per share and has a dividend yield of 3.7%. Shaw Communications pays an annual dividend of $0.95 per share and has a dividend yield of 4.3%. Telefonica Brasil SA pays out 81.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Shaw Communications pays out 118.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telefonica Brasil SA has raised its dividend for 4 consecutive years.
Insider and Institutional Ownership
10.0% of Telefonica Brasil SA shares are owned by institutional investors. Comparatively, 51.8% of Shaw Communications shares are owned by institutional investors. 1.0% of Shaw Communications shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Shaw Communications beats Telefonica Brasil SA on 10 of the 16 factors compared between the two stocks.
Telefonica Brasil SA Company Profile
Telefonica Brasil S.A. is a mobile telecommunications company in Brazil offering postpaid mobile services. The Company also operates as a fixed telecommunications company in the state of Sao Paulo. The Company markets its mobile services under its Vivo brand. It offers its clients a portfolio of products, including mobile and fixed voice, mobile data, fixed broadband, ultra-fast broadband, Pay television, information technology and digital services. Its operations consist of local and long distance fixed telephone services; mobile services, including value-added services; data services, including broadband services and mobile data services; Pay television services through direct to home (DTH), Internet protocol television (IPTV) and cable; network services, such as rental of facilities, as well as other services; wholesale services, including interconnection; digital services; services designed specifically for corporate customers, and the sale of wireless devices and accessories.
Shaw Communications Company Profile
Shaw Communications Inc. (Shaw) is a diversified connectivity provider. The Company operates through four divisions: Consumer, Wireless, Business Network Services and Business Infrastructure Services. Under the Consumer division, the Company offers Cable telecommunications and Satellite video services to residential customers. Its Business Network Services division offers data networking, Cable telecommunications, Satellite video and fleet tracking services to businesses and public sector entities. Its Business Infrastructure Services division offers data center colocation, cloud technology and managed information technology (IT) solutions to businesses. The Company offers wireless services for voice and data communications through its Wireless division. Its wireline services offer approximately 120 high definition (HD) channels and over 10,000 on-demand, pay-per-view and subscription movie and television programming titles.
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