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

Institutional and Insider Ownership

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

Profitability

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

Net Margins Return on Equity Return on Assets
Oi SA -24.34% -49.64% -7.06%
Telefonica SA 5.18% 29.02% 6.53%

Dividends

Telefonica SA pays an annual dividend of $0.51 per share and has a dividend yield of 4.9%. Oi SA 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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Oi SA and Telefonica SA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Oi SA 0 0 0 0 N/A
Telefonica SA 2 4 7 0 2.38

Telefonica SA has a consensus price target of $10.83, indicating a potential upside of 3.57%. Given Telefonica SA’s higher probable upside, analysts plainly believe Telefonica SA is more favorable than Oi SA.

Valuation and Earnings

This table compares Oi SA and Telefonica SA’s revenue, earnings per share (EPS) and valuation.

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

Telefonica SA has higher revenue and earnings than Oi SA.

Summary

Telefonica SA beats Oi SA on 9 of the 10 factors compared between the two stocks.

Oi SA Company Profile

Oi S.A. is an integrated telecommunications service provider in Brazil. The Company is a switched fixed-line telephony services (STFC) concessionaire. It is engaged in the provision of STFC as a local and intraregional long-distance carrier. Its segments include Residential Services, Personal Mobility, and SMEs/Corporate. It offers a range of integrated telecommunications services that include fixed and mobile, broadband, pay television (TV), data transmission and Internet provider services. The Company’s Residential Services segment is focused on the sale of fixed telephony services, including voice services, data communication services (broadband), and pay TV. The Personal Mobility segment is focused on the sale of mobile telephony services to subscription and prepaid customers, and mobile broadband customer. The SMEs/Corporate segment includes corporate solutions offered to its small, medium-sized, and large corporate customers.

Telefonica SA Company Profile

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).

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