CenturyLink (NYSE: CTL) and 8×8 (NASDAQ:EGHT) are both computer and technology companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for CenturyLink and 8×8, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CenturyLink 3 6 4 0 2.08
8×8 0 4 6 0 2.60

CenturyLink presently has a consensus target price of $25.45, indicating a potential upside of 26.14%. 8×8 has a consensus target price of $17.44, indicating a potential upside of 24.16%. Given CenturyLink’s higher probable upside, equities analysts plainly believe CenturyLink is more favorable than 8×8.

Profitability

This table compares CenturyLink and 8×8’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CenturyLink 2.20% 8.43% 2.36%
8×8 -2.44% 1.38% 1.20%

Insider and Institutional Ownership

83.0% of CenturyLink shares are held by institutional investors. Comparatively, 69.5% of 8×8 shares are held by institutional investors. 0.6% of CenturyLink shares are held by insiders. Comparatively, 4.4% of 8×8 shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares CenturyLink and 8×8’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CenturyLink $16.97 billion 0.65 $6.06 billion $0.69 29.25
8×8 $262.45 million 4.92 -$391,000.00 ($0.06) -234.17

CenturyLink has higher revenue and earnings than 8×8. 8×8 is trading at a lower price-to-earnings ratio than CenturyLink, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

CenturyLink has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, 8×8 has a beta of 0.37, meaning that its stock price is 63% less volatile than the S&P 500.

Dividends

CenturyLink pays an annual dividend of $2.16 per share and has a dividend yield of 10.7%. 8×8 does not pay a dividend. CenturyLink pays out 313.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

CenturyLink beats 8×8 on 10 of the 15 factors compared between the two stocks.

CenturyLink Company Profile

CenturyLink, Inc. is an integrated communications company. The Company is engaged in providing an array of communications services to its residential and business customers. Its segments include business, which provides strategic, legacy and data integration products and services to small, medium and enterprise business, wholesale and governmental customers, including other communication providers, and consumer, which provides strategic and legacy products and services to residential customers. Its communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching (MPLS), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol (VoIP), information technology and other ancillary services. As of December 31, 2016, it served approximately 5.9 million broadband subscribers and 325,000 Prism TV subscribers.

8×8 Company Profile

8×8, Inc. provides cloud-based, enterprise-class software solutions. The Company’s solutions are delivered through Software as a Service (SaaS) business model. Its segments include Americas and Europe. Its software platform brings together cloud, mobile, collaboration, video and data science technologies. Through a combination of open application program interface (API) and pre-built integrations, its solutions leverage critical customer context from internal data systems and customer relationship management (CRM) systems. Its software product, branded as 8×8 Virtual Office, delivers voice as a service across the world. 8×8 Virtual Office enables a customer to use a single business phone number to place and receive calls from any supported device. It provides software to enable a multi-channel contact center under the 8×8 Virtual Contact Center brand. Its Virtual Office Meetings software solution is a tool for teams within the enterprise to meet and collaborate on a shared project.

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