Consolidated Communications (NASDAQ:CNSL) and IDT (NYSE:IDT) are both small-cap utilities companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, analyst recommendations and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Consolidated Communications and IDT, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Consolidated Communications 0 3 1 0 2.25
IDT 0 1 0 0 2.00

Consolidated Communications currently has a consensus target price of $14.67, suggesting a potential upside of 13.87%. Given Consolidated Communications’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Consolidated Communications is more favorable than IDT.

Earnings & Valuation

This table compares Consolidated Communications and IDT’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Consolidated Communications $1.06 billion 0.87 $64.94 million $0.26 49.54
IDT $1.50 billion 0.09 $8.17 million N/A N/A

Consolidated Communications has higher earnings, but lower revenue than IDT.

Dividends

Consolidated Communications pays an annual dividend of $1.55 per share and has a dividend yield of 12.0%. IDT pays an annual dividend of $0.36 per share and has a dividend yield of 6.6%. Consolidated Communications pays out 596.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk & Volatility

Consolidated Communications has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, IDT has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500.

Institutional and Insider Ownership

71.3% of Consolidated Communications shares are held by institutional investors. Comparatively, 41.9% of IDT shares are held by institutional investors. 2.4% of Consolidated Communications shares are held by insiders. Comparatively, 20.5% of IDT shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Consolidated Communications and IDT’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Consolidated Communications 3.47% -3.15% -0.45%
IDT -0.89% 0.06% 0.01%

Summary

Consolidated Communications beats IDT on 8 of the 14 factors compared between the two stocks.

Consolidated Communications Company Profile

Consolidated Communications Holdings, Inc., through its subsidiaries, provides various integrated communications services to business and residential customers in the United States. It offers a range of communication services and products that include local and long-distance, high-speed broadband Internet access, video, voice over Internet protocol, private line, custom calling features, security, cloud, data center, managed and IT, and directory publishing services, as well as engages in equipment sales activities. The company also sells and supports telecommunications equipment, such as key, private branch exchange, IP-based telephone systems, and other hardware solutions, as well as offers support services to medium and large business customers. As of December 31, 2017, it had approximately 972 thousand voice connections, 784 thousand data connections, and 103 thousand video connections. The company serves customers in consumer, commercial, and carrier channels. Consolidated Communications Holdings, Inc. was founded in 1894 and is headquartered in Mattoon, Illinois.

IDT Company Profile

IDT Corporation, through its subsidiaries, operates primarily in the telecommunications and payment industries in the United States and internationally. It operates in three segments: Telecom Platform Services, Unified Communications as a Service, and Consumer Phone Services. The Telecom Platform Services segment offers retail telecommunication products, including international long-distance calling products primarily to foreign-born communities; payment offerings, such as international and domestic airtime top-up, and international money transfer services; and wholesale international long distance traffic termination services for tier 1 fixed line and mobile network operators, as well as for other service providers. The Unified Communications as a Service segment provides voice over Internet protocol products and services under the net2phone brand name, including cable telephony services; cloud-based private branch exchange (PBX) services to enterprise customers primarily through value-added resellers, service providers, telecom agents, and managed service providers; session initiation protocol trunking services that support inbound and outbound domestic and international calling from an IP PBX; and PicuP, an automated business phone service that answers, routes, and manages voice calls. This segment also offers its services through distributors, system integrators, and master agents. The Consumer Phone Services segment provides bundled local/long distance phone services, including unlimited local, regional toll and domestic long distance calling, and calling features under the IDT America brand name to residential customers. As of July 31, 2017, this segment had approximately 3,500 active customers for its bundled local/long distance plans and approximately 14,500 customers for its long distance-only plans. The company is also involved in real estate holdings and other businesses. IDT Corporation was founded in 1990 and is headquartered in Newark, New Jersey.

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