Critical Analysis: Oi SA (OIBR) versus FairPoint Communications (FRP)
Oi SA (NYSE: OIBR) and FairPoint Communications (NASDAQ:FRP) are both small-cap integrated telecommunications services – nec companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.
Institutional & Insider Ownership
88.6% of FairPoint Communications shares are owned by institutional investors. 7.6% of FairPoint Communications shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares Oi SA and FairPoint Communications’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and recommmendations for Oi SA and FairPoint Communications, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
FairPoint Communications has a consensus price target of $17.00, indicating a potential upside of 6.58%. Given FairPoint Communications’ higher probable upside, analysts plainly believe FairPoint Communications is more favorable than Oi SA.
Risk & Volatility
Oi SA has a beta of 2.22, meaning that its share price is 122% more volatile than the S&P 500. Comparatively, FairPoint Communications has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.
Earnings & Valuation
This table compares Oi SA and FairPoint Communications’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
Oi SA is trading at a lower price-to-earnings ratio than FairPoint Communications, indicating that it is currently the more affordable of the two stocks.
FairPoint Communications beats Oi SA on 6 of the 8 factors compared between the two stocks.
About Oi SA
Oi S.A. is an integrated telecommunications service provider in Brazil. The Company is a switched fixed-line telephony services (STFC) concessionaire. It is engaged in the provision of STFC as a local and intraregional long-distance carrier. Its segments include Residential Services, Personal Mobility, and SMEs/Corporate. It offers a range of integrated telecommunications services that include fixed and mobile, broadband, pay television (TV), data transmission and Internet provider services. The Company’s Residential Services segment is focused on the sale of fixed telephony services, including voice services, data communication services (broadband), and pay TV. The Personal Mobility segment is focused on the sale of mobile telephony services to subscription and prepaid customers, and mobile broadband customer. The SMEs/Corporate segment includes corporate solutions offered to its small, medium-sized, and large corporate customers.
About FairPoint Communications
FairPoint Communications, Inc. is a provider of data, voice and communications services to business, wholesale and residential customers within its service territories. The Company offers its customers a suite of services, such as Ethernet, Session Initiation Protocol Trunking (SIP-Trunking), hosted Primary Branch Exchange (hosted PBX), managed services, data center colocation services, high capacity data transport and other Internet protocol (IP)-based services over its fiber-based network. It also offers Internet access, high-speed data, and local and long distance voice services. It provides services, such as Data and Internet Services, which include optical, Ethernet, Ethernet virtual circuit technology for cellular backhaul and private line special access services. It offers Voice Services, which include Local Calling Services, Long Distance Services and 9-1-1 Services. It also offers Network Transport Services, Interstate Access Charges and Intrastate Access Charges.
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