Shenandoah Telecommunications (NASDAQ:SHEN) and Telecom Argentina (NYSE:TEO) are both mid-cap utilities companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, dividends, risk, institutional ownership and earnings.
Earnings & Valuation
This table compares Shenandoah Telecommunications and Telecom Argentina's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Shenandoah Telecommunications | $633.91 million | 3.55 | $54.94 million | $1.10 | 41.03 |
Telecom Argentina | $4.00 billion | 0.63 | $-91,000,000.00 | ($0.17) | -34.24 |
Shenandoah Telecommunications has higher earnings, but lower revenue than Telecom Argentina. Telecom Argentina is trading at a lower price-to-earnings ratio than Shenandoah Telecommunications, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Shenandoah Telecommunications has a beta of 0.33, meaning that its stock price is 67% less volatile than the S&P 500. Comparatively, Telecom Argentina has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.
Profitability
This table compares Shenandoah Telecommunications and Telecom Argentina's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Shenandoah Telecommunications | 16.88% | 11.44% | 3.03% |
Telecom Argentina | 3.84% | 2.72% | 1.46% |
Analyst Ratings
This is a breakdown of current recommendations and price targets for Shenandoah Telecommunications and Telecom Argentina, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Shenandoah Telecommunications | 0 | 3 | 0 | 0 | 2.00 |
Telecom Argentina | 1 | 1 | 0 | 0 | 1.50 |
Shenandoah Telecommunications currently has a consensus target price of $49.50, indicating a potential upside of 9.68%. Telecom Argentina has a consensus target price of $7.00, indicating a potential upside of 20.27%. Given Telecom Argentina's higher possible upside, analysts plainly believe Telecom Argentina is more favorable than Shenandoah Telecommunications.
Institutional & Insider Ownership
53.4% of Shenandoah Telecommunications shares are owned by institutional investors. Comparatively, 4.0% of Telecom Argentina shares are owned by institutional investors. 4.3% of Shenandoah Telecommunications shares are owned by company insiders. Comparatively, 1.0% of Telecom Argentina shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Dividends
Shenandoah Telecommunications pays an annual dividend of $0.34 per share and has a dividend yield of 0.8%. Telecom Argentina pays an annual dividend of $0.35 per share and has a dividend yield of 6.0%. Shenandoah Telecommunications pays out 30.9% of its earnings in the form of a dividend. Telecom Argentina pays out -205.9% 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. Telecom Argentina is clearly the better dividend stock, given its higher yield and lower payout ratio.
Summary
Shenandoah Telecommunications beats Telecom Argentina on 10 of the 15 factors compared between the two stocks.