BCE (NYSE: BCE) and Telecom Argentina Stet – France Telecom (NYSE:TEO) are both mid-cap utilities companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, institutional ownership, valuation, dividends, earnings and profitability.

Dividends

BCE pays an annual dividend of $2.13 per share and has a dividend yield of 4.6%. Telecom Argentina Stet – France Telecom pays an annual dividend of $0.45 per share and has a dividend yield of 1.5%. BCE pays out 87.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Telecom Argentina Stet – France Telecom pays out 26.6% of its earnings in the form of a dividend.

Risk and Volatility

BCE has a beta of 0.36, indicating that its stock price is 64% less volatile than the S&P 500. Comparatively, Telecom Argentina Stet – France Telecom has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500.

Institutional & Insider Ownership

44.4% of BCE shares are held by institutional investors. Comparatively, 6.0% of Telecom Argentina Stet – France Telecom shares are held by institutional investors. 0.2% of BCE shares are held by insiders. Comparatively, 1.0% of Telecom Argentina Stet – France Telecom shares are held by 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.

Profitability

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

Net Margins Return on Equity Return on Assets
BCE 12.85% 21.08% 5.78%
Telecom Argentina Stet – France Telecom 8.92% 25.23% 10.79%

Analyst Ratings

This is a summary of recent recommendations for BCE and Telecom Argentina Stet – France Telecom, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
BCE 0 4 4 0 2.50
Telecom Argentina Stet – France Telecom 0 2 2 0 2.50

BCE currently has a consensus price target of $57.25, suggesting a potential upside of 22.72%. Telecom Argentina Stet – France Telecom has a consensus price target of $29.00, suggesting a potential downside of 4.92%. Given BCE’s higher probable upside, analysts clearly believe BCE is more favorable than Telecom Argentina Stet – France Telecom.

Earnings and Valuation

This table compares BCE and Telecom Argentina Stet – France Telecom’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
BCE $17.69 billion 2.37 $6.63 billion $2.44 19.12
Telecom Argentina Stet – France Telecom $3.33 billion 1.78 $888.28 million $1.69 18.05

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

Summary

BCE beats Telecom Argentina Stet – France Telecom on 10 of the 15 factors compared between the two stocks.

About BCE

BCE Inc. is a communications company. The Company’s segments include Bell Wireless, Bell Wireline and Bell Media. Its Bell Wireless segment provides wireless voice and data communications products and services to its residential, small and medium-sized business and large enterprise customers across Canada. Its Bell Wireline segment provides data, including Internet access and Internet protocol television (IPTV), local telephone, long distance, as well as other communications services and products to its residential, small and medium-sized business and large enterprise customers, primarily in Ontario, Quebec and the Atlantic provinces, while Satellite television (TV) service and connectivity to business customers are available nationally across Canada. Its Bell Media segment provides conventional, specialty and pay Television, digital media, and radio broadcasting services and out of home (OOH) advertising services to customers across Canada.

About Telecom Argentina Stet – France Telecom

Telecom Argentina S.A. provides fixed-line telecommunications services in Argentina, and also provides other telephone-related services, such as international long-distance service, data transmission, information technology solutions outsourcing and Internet services. The Company’s segments include Fixed Telecommunications Services (Fixed Services), Personal Mobile Telecommunications Services (Personal Mobile Services) and Nucleo Mobile Telecommunications Services (Nucleo Mobile Services). The Company, through its subsidiaries, also provides mobile telecommunications services and international wholesale services. The Fixed services segment consists of basic telephone services, interconnection services, data transmission and Internet services, information and communication technology services, and other telephone services. The Company, through its subsidiaries, such as Telecom Personal S.A. and Nucleo S.A., provides mobile services in Argentina and Paraguay, respectively.

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