Otelco (NASDAQ:OTEL) and Windstream (OTCMKTS:WINMQ) are both small-cap computer and technology companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares Otelco and Windstream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Otelco 13.40% 72.29% 7.40%
Windstream -52.19% N/A -6.78%

Valuation & Earnings

This table compares Otelco and Windstream’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Otelco $66.07 million 0.63 $9.47 million N/A N/A
Windstream $5.71 billion 0.00 -$723.00 million N/A N/A

Otelco has higher earnings, but lower revenue than Windstream.

Institutional & Insider Ownership

11.6% of Otelco shares are owned by institutional investors. Comparatively, 0.1% of Windstream shares are owned by institutional investors. 4.6% of Otelco shares are owned by insiders. Comparatively, 1.2% of Windstream shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Risk and Volatility

Otelco has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Windstream has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations for Otelco and Windstream, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Otelco 0 0 0 0 N/A
Windstream 0 0 0 0 N/A

Summary

Otelco beats Windstream on 8 of the 9 factors compared between the two stocks.

Otelco Company Profile

Otelco Inc. provides a range of telecommunications services on a retail and wholesale basis. The company offers local services, including voice lines that provide local dial tone and calling features, such as caller identification, call waiting, call forwarding, and voicemail; long distance services; billing and collection services for other carriers under contract; and directory advertising services. It also provides network access services comprising the origination, transportation, and termination of calls of long distance, wireless, and other interexchange carriers; digital high-speed data lines and ancillary services, such as Web hosting and computer virus protection; and basic, digital, high-definition, digital video recording, video on demand, and pay per view cable television services. In addition, it offers Internet protocol television; wireless security systems and system monitoring services; and private/hybrid cloud hosting services, as well as consulting and professional IT engineering services for mission-critical software applications for small and mid-sized companies. Further, the company rents fiber to transport data and other telecommunications services. It primarily serves business and residential customers residing in and adjacent to the exchanges in Alabama, Maine, Massachusetts, Missouri, Vermont, and West Virginia; and business customers in Maine and New Hampshire. As of March 6, 2019, it operated approximately 99,000 voice and data access lines. The company was founded in 1998 and is based in Oneonta, Alabama.

Windstream Company Profile

Windstream Holdings, Inc. provides network communications and technology solutions in the United States. Its Consumer & Small Business segment offers services, including traditional local and long-distance voice services, and high-speed Internet services; and value-added services, such as security and online back-up. It also offers consumer video services; premium broadband and video entertainment services under the Kinetic brand; voice and Web conferencing products; and advanced hosted-voice, network management, and business continuity services, as well as owns and operates cable television franchises. This segment serves approximately 1.4 million residential and small business customers. The company's Enterprise segment offers integrated voice and data services, which deliver voice and broadband services over a single Internet connection, data transport services, and multi-site networking services; and other data services comprising cloud computing, and collocation and managed services as an alternative to traditional information technology infrastructure. Its Wholesale segment provides network bandwidth to other telecommunications carriers, network operators, and content providers; fiber-to-the-tower connections to support the wireless backhaul market; voice and data carrier services to other communications providers and large scale purchasers; and special access services and time division multiplexing private line transport. The company's Consumer CLEC segment offers traditional voice and long-distance services, nationwide Internet access services, and dial-up and high-speed, as well as online backup and various email services. Windstream Holdings, Inc. also leases and sells broadband modems and home networking gateways; and sells computers and phones. The company was incorporated in 2013 and is based in Little Rock, Arkansas. On February 25, 2019, Windstream Holdings, Inc. along with its 202 affiliates, filed a voluntary petition for reorganization under Chapter 11 in the US Bankruptcy Court for the Southern District of New York.

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