Telefónica Deutschland (OTCMKTS:TELDF) versus Shenandoah Telecommunications (NASDAQ:SHEN) Critical Comparison

Telefónica Deutschland (OTCMKTS:TELDF) and Shenandoah Telecommunications (NASDAQ:SHEN) are both communication services companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, analyst recommendations and valuation.

Profitability

This table compares Telefónica Deutschland and Shenandoah Telecommunications’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telefónica Deutschland	N/A	N/A	N/A
Shenandoah Telecommunications	-10.83%	-4.54%	-2.07%

Dividends

Telefónica Deutschland pays an annual dividend of $0.27 per share and has a dividend yield of 11.7%. Shenandoah Telecommunications pays an annual dividend of $0.11 per share and has a dividend yield of 0.8%. Telefónica Deutschland pays out -205,565.9% of its earnings in the form of a dividend. Shenandoah Telecommunications pays out -14.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Shenandoah Telecommunications has increased its dividend for 3 consecutive years. Telefónica Deutschland is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

9.3% of Telefónica Deutschland shares are held by institutional investors. Comparatively, 62.0% of Shenandoah Telecommunications shares are held by institutional investors. 5.0% of Shenandoah Telecommunications shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Telefónica Deutschland and Shenandoah Telecommunications”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telefónica Deutschland	N/A	N/A	N/A	($0.00)	-17,538.76
Shenandoah Telecommunications	$367.00 million	1.97	-$39.39 million	($0.78)	-16.71

Telefónica Deutschland has higher earnings, but lower revenue than Shenandoah Telecommunications. Telefónica Deutschland is trading at a lower price-to-earnings ratio than Shenandoah Telecommunications, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Telefónica Deutschland and Shenandoah Telecommunications, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telefónica Deutschland	0	0	0	0	0.00
Shenandoah Telecommunications	1	0	2	0	2.33

Shenandoah Telecommunications has a consensus target price of $27.50, suggesting a potential upside of 111.05%. Given Shenandoah Telecommunications’ stronger consensus rating and higher possible upside, analysts clearly believe Shenandoah Telecommunications is more favorable than Telefónica Deutschland.

Summary

Shenandoah Telecommunications beats Telefónica Deutschland on 8 of the 14 factors compared between the two stocks.

About Telefónica Deutschland

Telefónica Deutschland Holding AG, together with its subsidiaries, provides integrated telecommunication services to private and business customers in Germany. It offers fiber-to-the-home lines; broadband services, consisting of VDSL, cable, fiber, and fixed mobile substitution services; and machine to machine communication and managed connectivity services. The company offers digital services in the fields of Internet of Things, as well as O2 Tv and O2 cloud. In addition, it provides access to infrastructure and services for its wholesale partners. Further, the company provides its products and services through a network of independently operated franchise and premium partner shops, and online and telesales channels, as well as indirect selling channels, such as partnerships and co-operations with retailers. It markets its products and services under the O2, Blau, AY YILDIZ, Ortel Mobile, and Telefonica brand names. The company was formerly known as Telefónica Germany Verwaltungs GmbH and changed its name to Telefónica Deutschland Holding AG in September 2012. The company is based in Munich, Germany. Telefónica Deutschland Holding AG operates as a subsidiary of Telefonica Germany Holdings Limited.

About Shenandoah Telecommunications

Shenandoah Telecommunications Company, together with its subsidiaries, provides a range of broadband communication services and cell tower colocation space in the Mid-Atlantic portion of the United States. It operates in two segments, Broadband and Tower. The company Broadband segment offers broadband, video, and voice services to residential and commercial customers in Virginia, West Virginia, Maryland, Pennsylvania, and Kentucky through hybrid fiber coaxial cable under the Shentel brand; and fiber optic services under the Glo Fiber brand name. This segment also leases dark fiber and provides Ethernet and wavelength fiber optic services to enterprise and wholesale customers under the Glo Fiber Enterprise and Glo Fiber Wholesale brand names; and provides voice data and DSL telephone services. The Tower segment owns macro cellular towers and leases colocation space to the wireless communications providers. Shenandoah Telecommunications Company was founded in 1902 and is based in Edinburg, Virginia.