magicJack VocalTec (NYSE: BT) and BT Group (NYSE:BT) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.

Earnings and Valuation

This table compares magicJack VocalTec and BT Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
magicJack VocalTec $87.99 million 1.59 -$24.96 million N/A N/A
BT Group $31.46 billion 0.90 $2.70 billion $1.85 7.69

BT Group has higher revenue and earnings than magicJack VocalTec.

Analyst Recommendations

This is a summary of recent ratings and target prices for magicJack VocalTec and BT Group, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
magicJack VocalTec 0 0 0 0 N/A
BT Group 1 10 5 0 2.25

BT Group has a consensus price target of $302.22, indicating a potential upside of 2,023.84%. Given BT Group’s higher probable upside, analysts plainly believe BT Group is more favorable than magicJack VocalTec.

Institutional and Insider Ownership

68.9% of magicJack VocalTec shares are owned by institutional investors. Comparatively, 0.8% of BT Group shares are owned by institutional investors. 2.3% of magicJack VocalTec shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares magicJack VocalTec and BT Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
magicJack VocalTec 6.99% 43.16% 12.26%
BT Group 8.64% 32.72% 6.43%

Volatility and Risk

magicJack VocalTec has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500. Comparatively, BT Group has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500.

Dividends

BT Group pays an annual dividend of $1.38 per share and has a dividend yield of 9.7%. magicJack VocalTec does not pay a dividend. BT Group pays out 74.6% of its earnings in the form of a dividend. BT Group has increased its dividend for 6 consecutive years.

Summary

BT Group beats magicJack VocalTec on 8 of the 15 factors compared between the two stocks.

About magicJack VocalTec

magicJack VocalTec Ltd., together with its subsidiaries, operates as a cloud communications company in the United States. The company's products and services allow users to make and/or receive free telephone calls to and from where the customer has broadband access to the Internet. It provides magicJack devices, such as The magicJack, magicJack PLUS, New magicJack PLUS, magicJack GO, and magicJack EXPRESS, which are voice-over-Internet-Protocol (VoIP) devices that enables customers to receive free VoIP phone service for their home, enterprise, or while traveling. The company also offers magicJack APP, an application that allows users to make and receive telephone calls through their smart phones using their magicJack account, as well as access to servers for a fee on a monthly or annual basis; and magicJack Connect App that offers Wi-Fi app-to-app calling and messaging services, as well as unlimited calling plans for the United States subscribers. In addition, it provides other magicJack-related products; and wholesales telephone services to VoIP providers and telecommunication carriers. Further, the company offers hosted unified communication as a service, as well as sells related hardware and network equipment to blue chip corporate customers; and VoIP services to small to medium sized businesses. It distributes its products through retail outlets, as well as direct sales. magicJack VocalTec Ltd. was founded in 1989 and is headquartered in Netanya, Israel.

About BT Group

BT Group plc provides communications services worldwide. Its Consumer segment sells telephones, baby monitors, and Wi-Fi extenders through high street retailers, online BT Shop, and Website BT.com; and offers home phone, copper and fiber broadband, TV, and mobile services in various packages. The company's EE segment offers 2G, 3G, and 4G mobile network services; broadband, fixed-voice, and TV services; and postpaid and prepaid plans, and emergency services network. This segment also sells 4G mobile phones, tablets, connected devices, and mobile broadband devices from various manufacturers. Its Business and Public Sector segment provides fixed voice, mobility, fiber and connectivity, and networked IT services to retailers, utilities, public sector, healthcare, sports, construction, finance, and educational sectors. The company's Global Services segment offers business communications and ICT services comprising BT Connect, BT Security, BT One, BT Contact, BT Compute, BT Advise, and BT for financial markets. This segment serves approximately 5,500 customers in 180 countries. Its Wholesale and Ventures segment enables communications providers and other organizations to provide fixed or mobile phone services. Its ventures provide mass-market services, such as directory enquiries and payphones; and enterprise services comprising BT Fleet and BT Redcare. This segment also provides broadband and Ethernet, voice, hosted communication, mobile virtual network operator, managed solutions, machine-to-machine, roaming, and media services. The company's Openreach segment engages in the provision of services over the local access network; and installation and maintenance of fiber and copper communications networks that connect homes and businesses. The company was formerly known as Newgate Telecommunications Limited and changed its name to BT Group plc in September 2001. BT Group plc was incorporated in 2001 and is headquartered in London, the United Kingdom.

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