Critical Review: IDT Corporation (IDT) & j2 Global (JCOM)
IDT Corporation (NYSE: IDT) and j2 Global (NASDAQ:JCOM) are both utilities companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, risk, dividends, institutional ownership, profitability, valuation and analyst recommendations.
This table compares IDT Corporation and j2 Global’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
50.4% of IDT Corporation shares are owned by institutional investors. 21.8% of IDT Corporation shares are owned by insiders. Comparatively, 5.2% of j2 Global shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares IDT Corporation and j2 Global’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|IDT Corporation||$1.50 billion||0.22||$8.17 million||$0.38||35.24|
|j2 Global||$874.26 million||4.09||$152.43 million||$2.70||27.33|
j2 Global has higher revenue, but lower earnings than IDT Corporation. j2 Global is trading at a lower price-to-earnings ratio than IDT Corporation, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and price targets for IDT Corporation and j2 Global, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
j2 Global has a consensus price target of $101.75, indicating a potential upside of 37.87%. Given j2 Global’s higher probable upside, analysts plainly believe j2 Global is more favorable than IDT Corporation.
IDT Corporation pays an annual dividend of $0.76 per share and has a dividend yield of 5.7%. j2 Global pays an annual dividend of $1.58 per share and has a dividend yield of 2.1%. IDT Corporation pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. j2 Global pays out 58.5% of its earnings in the form of a dividend.
Volatility and Risk
IDT Corporation has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, j2 Global has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500.
j2 Global beats IDT Corporation on 9 of the 15 factors compared between the two stocks.
IDT Corporation Company Profile
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.
j2 Global Company Profile
j2 Global, Inc. is a provider of services delivered through the Internet. The Company provides cloud services to businesses of all sizes, from individuals to enterprises. The Company operates in two segments: Business Cloud Services and Digital Media. The Company’s Digital Media business segment consists of the Web properties and business operations of Ziff Davis, Inc. (Ziff Davis). The Company’s cloud services and solutions include fax, voice and unified communications, email and customer relationship management, online backup, global network and operations, and customer support services. In February 2013, it acquired IGN Entertainment, Inc. On November 9, 2012, the Company acquired Ziff Davis. Effective March 18, 2013, it acquired MetroFax Inc. In April 2013, the Company acquired Backup Connect BV.
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