Analyzing Telekom Austria (OTCMKTS:TKAGY) and Atento (NYSE:ATTO)

Telekom Austria (OTCMKTS:TKAGY) and Atento (NYSE:ATTO) are both utilities companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, earnings, analyst recommendations, risk and profitability.

Profitability

This table compares Telekom Austria and Atento’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telekom Austria 8.17% 13.92% 4.46%
Atento -4.69% -23.51% -2.38%

Volatility and Risk

Telekom Austria has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500. Comparatively, Atento has a beta of 1.71, meaning that its share price is 71% more volatile than the S&P 500.

Insider and Institutional Ownership

19.6% of Atento shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Telekom Austria and Atento’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telekom Austria $5.11 billion 1.03 $366.20 million $1.10 14.41
Atento $1.71 billion 0.13 -$81.31 million ($1.61) -8.86

Telekom Austria has higher revenue and earnings than Atento. Atento is trading at a lower price-to-earnings ratio than Telekom Austria, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for Telekom Austria and Atento, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telekom Austria 0 2 1 0 2.33
Atento 1 0 1 0 2.00

Atento has a consensus target price of $108.75, suggesting a potential upside of 662.09%. Given Atento’s higher probable upside, analysts plainly believe Atento is more favorable than Telekom Austria.

Summary

Telekom Austria beats Atento on 9 of the 12 factors compared between the two stocks.

Telekom Austria Company Profile

Telekom Austria AG, together with its subsidiaries, provides fixed-line and mobile communications solutions to individuals, commercial and non-commercial organizations, and other national and international carriers. The company offers fixed-line services, including access, Internet, fixed-to-mobile calls, international traffic, voice value-added, interconnection, call center, television, IPTV, and smart home services, as well as data and ICT solutions; and digital mobile communications services, including value-added, text and multimedia messaging, m-commerce, information, and entertainment services. It also provides end-user terminal equipment; digital products; cloud and Internet of Things services; and mobile payment services. As of December 31, 2019, the company provided mobile communication services to approximately 21.3 million customers; and had approximately 6.1 million fixed-line revenue generating units. It has operations in Austria, Bulgaria, Croatia, Belarus, Slovenia, Serbia, and North Macedonia. The company is headquartered in Vienna, Austria. Telekom Austria AG is a subsidiary of América Móvil, S.A.B. de C.V.

Atento Company Profile

Atento S.A., together with its subsidiaries, provides customer relationship management, and business process outsourcing services and solutions in Brazil, the Americas, Europe, the Middle East, and Africa. It offers a range of front and back-end services, including sales, customer care, technical support, collections, and back office, as well as applications-processing and credit-management. The company serves clients primarily in the telecommunications, banking, and financial services sectors; and in multi-sectors, including consumer goods, services, public administration, healthcare, travel, and transportation and logistics, as well as technology and media. It provides its services and solutions through digital channels, which include SMS, email, chats, social media and apps, and others, as well as through voice. The company was formerly known as Atento Floatco S.A. Atento S.A. was founded in 1999 and is based in Luxembourg.

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