Telefonica SA (NYSE: TEF) and Neustar (NYSE:NSR) are both utilities companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, earnings, valuation, profitability and analyst recommendations.

Dividends

Telefonica SA pays an annual dividend of $0.51 per share and has a dividend yield of 4.9%. Neustar does not pay a dividend. Telefonica SA pays out 96.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Earnings & Valuation

This table compares Telefonica SA and Neustar’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Telefonica SA $64.58 billion 0.83 $20.19 billion $0.53 19.74
Neustar N/A N/A N/A $3.27 10.24

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

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Telefonica SA and Neustar, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telefonica SA 2 4 7 0 2.38
Neustar 0 3 0 0 2.00

Telefonica SA currently has a consensus target price of $10.83, indicating a potential upside of 3.57%. Neustar has a consensus target price of $29.50, indicating a potential downside of 11.94%. Given Telefonica SA’s stronger consensus rating and higher probable upside, equities analysts plainly believe Telefonica SA is more favorable than Neustar.

Risk and Volatility

Telefonica SA has a beta of 1.31, indicating that its stock price is 31% more volatile than the S&P 500. Comparatively, Neustar has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Profitability

This table compares Telefonica SA and Neustar’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telefonica SA 5.18% 29.02% 6.53%
Neustar 15.50% 19.28% 8.80%

Insider and Institutional Ownership

0.9% of Telefonica SA shares are owned by institutional investors. Comparatively, 88.8% of Neustar shares are owned by institutional investors. 0.0% of Telefonica SA shares are owned by company insiders. Comparatively, 2.9% of Neustar shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Neustar beats Telefonica SA on 7 of the 13 factors compared between the two stocks.

About Telefonica SA

Telefonica, S.A. is an integrated and diversified telecommunications group operating in Europe and Latin America. The Company’s services and products include Mobile business, Fixed-line telephony business and Digital services. Its segments include Telefonica Spain, Telefonica Brazil, Telefonica Germany, Telefonica United Kingdom and Telefonica Hispanoamerica (formed by the Company’s operators in Argentina, Chile, Peru, Colombia, Mexico, Venezuela and Central America, Ecuador and Uruguay). These segments are engaged in activities relating to wireline, wireless, cable, data, Internet and television (TV) businesses and other digital services in accordance with each location. It offers a range of mobile and related services and products to personal and business customers. It offers traditional fixed telecommunication services, Internet and broadband multimedia services and data and business-solutions services. It offers a range of digital services, such as Internet of Things (IoT).

About Neustar

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

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