Contrasting Telecom Argentina Stet – France Telecom (NYSE:TEO) and IDT (NYSE:IDT)

IDT (NYSE:IDT) and Telecom Argentina Stet – France Telecom (NYSE:TEO) are both mid-cap communication services companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.

Insider and Institutional Ownership

59.3% of IDT shares are owned by institutional investors. 23.8% of IDT shares are owned by company insiders. Comparatively, 1.0% of Telecom Argentina Stet – France Telecom shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

IDT has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500. Comparatively, Telecom Argentina Stet – France Telecom has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500.

Profitability

This table compares IDT and Telecom Argentina Stet – France Telecom’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
IDT	6.67%	24.22%	12.69%
Telecom Argentina Stet – France Telecom	7.61%	9.38%	4.11%

Earnings and Valuation

This table compares IDT and Telecom Argentina Stet – France Telecom”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
IDT	$1.30 billion	1.58	$86.63 million	$3.47	23.78
Telecom Argentina Stet – France Telecom	$6.81 billion	0.67	-$136.01 million	$1.23	8.55

IDT has higher earnings, but lower revenue than Telecom Argentina Stet – France Telecom. Telecom Argentina Stet – France Telecom is trading at a lower price-to-earnings ratio than IDT, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings for IDT and Telecom Argentina Stet – France Telecom, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
IDT	0	1	2	0	2.67
Telecom Argentina Stet – France Telecom	1	2	4	0	2.43

IDT currently has a consensus price target of $85.00, suggesting a potential upside of 3.01%. Telecom Argentina Stet – France Telecom has a consensus price target of $15.93, suggesting a potential upside of 51.44%. Given Telecom Argentina Stet – France Telecom’s higher possible upside, analysts plainly believe Telecom Argentina Stet – France Telecom is more favorable than IDT.

Summary

IDT beats Telecom Argentina Stet – France Telecom on 9 of the 14 factors compared between the two stocks.

About IDT

IDT Corporation is a telecommunications and technology company founded in 1990 by Howard Jonas, who serves as its executive chairman. The company provides communications, payment and business services to consumers and organizations in the United States and international markets. Its offerings include BOSS Revolution, which provides international calling and money-transfer services, and net2phone, which offers cloud-based business communications. IDT also provides wholesale voice and other communications services to telecom carriers.

About Telecom Argentina Stet – France Telecom

Telecom Argentina S.A. is a telecommunications and digital services provider based in Argentina. Its offerings include mobile and fixed-line phone service, broadband internet, pay television and digital entertainment, serving residential and business customers. The company markets mobile and internet services under the Personal brand and offers television and streaming services through Flow. It also provides connectivity and technology solutions to business and wholesale customers. Telecom Argentina was established in 1990 as part of the privatization of Argentina’s state-owned telephone system.