Reviewing Telefonica Brasil (NYSE:VIV) and Uniti Group (NASDAQ:UNIT)

Telefonica Brasil (NYSE:VIV) and Uniti Group (NASDAQ:UNIT) are both communication services companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Analyst Recommendations

This is a breakdown of current ratings for Telefonica Brasil and Uniti Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Telefonica Brasil	3	5	1	0	1.78
Uniti Group	0	7	1	1	2.33

Telefonica Brasil currently has a consensus target price of $14.66, suggesting a potential upside of 23.67%. Uniti Group has a consensus target price of $10.92, suggesting a potential upside of 14.43%. Given Telefonica Brasil’s higher possible upside, research analysts plainly believe Telefonica Brasil is more favorable than Uniti Group.

Volatility and Risk

Telefonica Brasil has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Uniti Group has a beta of 1.39, meaning that its share price is 39% more volatile than the S&P 500.

Profitability

This table compares Telefonica Brasil and Uniti Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Telefonica Brasil	10.64%	9.72%	5.18%
Uniti Group	28.68%	-133.07%	-4.09%

Valuation & Earnings

This table compares Telefonica Brasil and Uniti Group”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Telefonica Brasil	$10.67 billion	1.81	$1.10 billion	$0.78	15.20
Uniti Group	$2.23 billion	1.04	$1.30 billion	$2.71	3.52

Uniti Group has lower revenue, but higher earnings than Telefonica Brasil. Uniti Group is trading at a lower price-to-earnings ratio than Telefonica Brasil, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

5.2% of Telefonica Brasil shares are owned by institutional investors. Comparatively, 87.5% of Uniti Group shares are owned by institutional investors. 1.9% of Uniti Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Uniti Group beats Telefonica Brasil on 8 of the 14 factors compared between the two stocks.

About Telefonica Brasil

Telefônica Brasil S.A., together with its subsidiaries, operates as a mobile telecommunications company in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband internet access through 3G, 4G, 4.5G, and 5G, as well as mobile value-added and wireless roaming services. The company also offers data services, including broadband and mobile data services. In addition, it provides pay TV services through IPTV technologies; network services, such as rental of facilities; other services comprising internet access, private network connectivity, computer equipment leasing, extended service, caller identification, voice mail, cellular blocker, and others; wholesale services, including interconnection services to users of other network providers; and digital services, such as entertainment, cloud, and security and financial services. Further, the company offers multimedia communication services, which include audio, data, voice and other sounds, images, texts, and other information, as well as sells devices, such as smartphones, broadband USB modems, and other devices. Additionally, it provides telecommunications solutions and IT support to various industries, such as retail, manufacturing, services, financial institutions, government, etc. It markets and sells its solutions through own stores, dealers, retail and distribution channels, door-to-door sales, and outbound tele sales. The company was formerly known as Telecomunicações de São Paulo S.A. – TELESP and changed its name to Telefônica Brasil S.A. in October 2011. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil.

About Uniti Group

Uniti Group, Inc. is a real estate investment trust company, which engages in the acquisition, construction, and leasing of properties. It operates through the following business segments: Uniti Leasing, Uniti Fiber, and Corporate. The Uniti Leasing segment involves mission-critical communications assets on exclusive or shared-tenant basis, and dark fiber network. The Uniti Fiber segment includes the operation of infrastructure solutions, cell site backhauls, and dark fiber. The Corporate segment consists of office and shared service functions. The company was founded in February 2014 and is headquartered in Little Rock, AR.