IDT (NYSE: IDT) and BT Group (NYSE:BT) are both utilities companies, but which is the better investment? We will compare the two companies based on the strength of their risk, dividends, analyst recommendations, institutional ownership, valuation, earnings and profitability.

Dividends

IDT pays an annual dividend of $0.76 per share and has a dividend yield of 7.0%. BT Group pays an annual dividend of $0.96 per share and has a dividend yield of 5.2%. IDT pays out -115.2% of its earnings in the form of a dividend. BT Group pays out 92.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. IDT has increased its dividend for 6 consecutive years. IDT is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility & Risk

IDT has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, BT Group has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Earnings and Valuation

This table compares IDT and BT Group’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
IDT $1.50 billion 0.18 $8.17 million ($0.66) -16.55
BT Group $31.47 billion 1.16 $2.49 billion $1.04 17.68

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

Insider & Institutional Ownership

52.8% of IDT shares are owned by institutional investors. Comparatively, 1.0% of BT Group shares are owned by institutional investors. 21.8% of IDT shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares IDT and BT Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IDT -1.03% 7.53% 2.31%
BT Group 6.52% 33.11% 6.00%

Analyst Recommendations

This is a summary of current recommendations for IDT and BT Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IDT 0 0 0 0 N/A
BT Group 3 8 6 0 2.18

BT Group has a consensus price target of $333.33, indicating a potential upside of 1,712.58%. Given BT Group’s higher possible upside, analysts clearly believe BT Group is more favorable than IDT.

Summary

BT Group beats IDT on 10 of the 16 factors compared between the two stocks.

About IDT

IDT Corporation is a holding company with operations primarily in the telecommunications and payment industries. The Company’s segments include Telecom Platform Services, Consumer Phone Services and All Other. The Company’s Telecom Platform Services segment provides retail telecommunications and payment offerings, as well as wholesale international long distance traffic termination. The Telecom Platform Services segment markets and distributes multiple communications and payment services across four businesses: Retail Communications, Wholesale Carrier Services, Payment Services and Hosted Platform Solutions. The Company’s Consumer Phone Services segment provides consumer local and long distance services in certain states of the United States. The Telecom Platform Services and Consumer Phone Services segments comprise the Company’s IDT Telecom division. The All Other segment includes its real estate holdings and other smaller businesses.

About BT Group

BT Group plc is a communications services company. The Company is engaged in selling fixed-voice services, broadband, mobile and television products and services, as well as managed networked information technology (IT) solutions and cyber security protection. Its segments include Consumer, which provides fixed-voice, broadband, TV and mobile services; EE, which is a mobile network operator in the United Kingdom and provides mobile and fixed communications services to consumers; Business and Public Sector, which provides communications and IT services to businesses and the public sector in the United Kingdom and the Republic of Ireland (RoI) ;Global Services, which provides managed networked IT services to corporate customers; Wholesale and Ventures, which provides fixed and mobile services to communications providers (CPs); and Openreach, which provides copper and fiber connections between its exchanges and homes and businesses.

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