Head to Head Review: j2 Global (JCOM) vs. FairPoint Communications (FRP)
j2 Global (NASDAQ: JCOM) and FairPoint Communications (NASDAQ:FRP) are both mid-cap computer and technology companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, analyst recommendations, valuation, risk and profitability.
Insider & Institutional Ownership
88.6% of FairPoint Communications shares are held by institutional investors. 5.2% of j2 Global shares are held by company insiders. Comparatively, 7.6% of FairPoint Communications shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
j2 Global pays an annual dividend of $1.54 per share and has a dividend yield of 2.0%. FairPoint Communications does not pay a dividend. j2 Global pays out 57.0% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares j2 Global and FairPoint Communications’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|j2 Global||$874.26 million||4.19||$152.43 million||$2.70||28.08|
j2 Global has higher revenue and earnings than FairPoint Communications. FairPoint Communications is trading at a lower price-to-earnings ratio than j2 Global, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
j2 Global has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500. Comparatively, FairPoint Communications has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500.
This table compares j2 Global and FairPoint Communications’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of current recommendations for j2 Global and FairPoint Communications, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
j2 Global presently has a consensus price target of $101.75, suggesting a potential upside of 34.22%. FairPoint Communications has a consensus price target of $17.00, suggesting a potential upside of Infinity. Given FairPoint Communications’ higher probable upside, analysts plainly believe FairPoint Communications is more favorable than j2 Global.
j2 Global beats FairPoint Communications on 9 of the 13 factors compared between the two stocks.
About j2 Global
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.
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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