Cincinnati Bell (NYSE: CBB) and Frontier Communications Corporation (NASDAQ:FTR) are both small-cap utilities companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, institutional ownership, analyst recommendations and risk.

Institutional and Insider Ownership

85.2% of Cincinnati Bell shares are owned by institutional investors. 1.4% of Cincinnati Bell shares are owned by company insiders. Comparatively, 0.9% of Frontier Communications Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Cincinnati Bell and Frontier Communications Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cincinnati Bell $1.17 billion 0.73 $282.90 million $1.65 12.21
Frontier Communications Corporation $9.59 billion 0.10 $3.74 billion ($14.42) -0.81

Frontier Communications Corporation has higher revenue and earnings than Cincinnati Bell. Frontier Communications Corporation is trading at a lower price-to-earnings ratio than Cincinnati Bell, indicating that it is currently the more affordable of the two stocks.

Dividends

Frontier Communications Corporation pays an annual dividend of $2.40 per share and has a dividend yield of 20.5%. Cincinnati Bell does not pay a dividend. Frontier Communications Corporation pays out -16.6% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Cincinnati Bell and Frontier Communications Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cincinnati Bell 2 2 1 0 1.80
Frontier Communications Corporation 2 9 2 0 2.00

Cincinnati Bell currently has a consensus price target of $23.50, suggesting a potential upside of 16.63%. Frontier Communications Corporation has a consensus price target of $8.49, suggesting a potential downside of 27.43%. Given Cincinnati Bell’s higher possible upside, research analysts plainly believe Cincinnati Bell is more favorable than Frontier Communications Corporation.

Profitability

This table compares Cincinnati Bell and Frontier Communications Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cincinnati Bell 6.84% -3.87% 0.70%
Frontier Communications Corporation -9.35% -1.28% -0.19%

Risk & Volatility

Cincinnati Bell has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500. Comparatively, Frontier Communications Corporation has a beta of 0.6, meaning that its stock price is 40% less volatile than the S&P 500.

Summary

Cincinnati Bell beats Frontier Communications Corporation on 8 of the 15 factors compared between the two stocks.

Cincinnati Bell Company Profile

Cincinnati Bell Inc., along with its subsidiaries, provides diversified telecommunications and technology services. The Company operates through two segments: Entertainment and Communications, and IT Services and Hardware. Through its Entertainment and Communications segment, the Company provides high-speed data, video and voice solutions to consumers and businesses over fiber network and a legacy copper network. The IT Services and Hardware segments operates through its subsidiary, Cincinnati Bell Technology Solutions Inc. (CBTS), which is engaged in the sale and service of end-to-end communications and information technology (IT) systems and solutions for business customers across the United States. The Company has interest in CyrusOne Inc., which operates carrier-neutral data center colocation business.

Frontier Communications Corporation Company Profile

Frontier Communications Corporation (Frontier) is a provider of communications services in the United States. The Company offers a portfolio of communications services for residential and business customers. Its products and services include data and Internet services, video services, voice services, access services and customer premise equipment (CPE). The Company offers a range of broadband services. The principal residential service it provides is broadband Internet service. Its commercial services include Ethernet, Dedicated Internet, Multiprotocol Label Switching (MPLS), Time Division Multiplexing (TDM) data transport services and optical transport services. It also offers wireless broadband services (using unlicensed spectrum) in various markets utilizing networks that it owns or operates. In addition, the Company offers its Frontier Secure suite of products, including computer security, cloud backup and sharing, identity protection and equipment insurance.

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