Verizon Communications (NYSE: VZ) and Inteliquent (NASDAQ:IQNT) are both telecommunications services companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.

Profitability

This table compares Verizon Communications and Inteliquent’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Verizon Communications 12.80% 58.66% 6.13%
Inteliquent 9.43% 19.39% 16.35%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Verizon Communications and Inteliquent, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Verizon Communications 0 18 5 0 2.22
Inteliquent 0 0 0 0 N/A

Verizon Communications presently has a consensus price target of $50.67, indicating a potential upside of 7.58%. Given Verizon Communications’ higher possible upside, equities analysts plainly believe Verizon Communications is more favorable than Inteliquent.

Dividends

Verizon Communications pays an annual dividend of $2.36 per share and has a dividend yield of 5.0%. Inteliquent pays an annual dividend of $0.47 per share and has a dividend yield of 2.1%. Verizon Communications pays out 60.5% of its earnings in the form of a dividend. Inteliquent pays out 44.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Inteliquent has raised its dividend for 10 consecutive years.

Insider & Institutional Ownership

63.2% of Verizon Communications shares are owned by institutional investors. Comparatively, 88.0% of Inteliquent shares are owned by institutional investors. 0.1% of Verizon Communications shares are owned by company insiders. Comparatively, 5.5% of Inteliquent shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Verizon Communications and Inteliquent’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Verizon Communications $125.98 billion 1.53 $13.13 billion $3.90 12.08
Inteliquent N/A N/A N/A $1.05 21.81

Verizon Communications has higher revenue and earnings than Inteliquent. Verizon Communications is trading at a lower price-to-earnings ratio than Inteliquent, indicating that it is currently the more affordable of the two stocks.

Summary

Verizon Communications beats Inteliquent on 7 of the 12 factors compared between the two stocks.

Verizon Communications Company Profile

Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, information and entertainment products and services to consumers, businesses and governmental agencies. Its segments include Wireless and Wireline. The Wireless segment offers communications products and services, including wireless voice and data services and equipment sales, to consumer, business and government customers across the United States. The Wireline segment offers voice, data and video communications products and services, such as broadband video, data center and cloud services, security and managed network services, and local and long distance voice services. The Company has combined Yahoo! Inc.’s operating assets with its existing AOL Inc. business to create a new subsidiary, Oath Inc., owns a diverse house of more than 50 media and technology brands. The Oath portfolio includes HuffPost, Yahoo Sports, AOL.com, MAKERS, Tumblr, Yahoo Finance and Yahoo Mail.

Inteliquent Company Profile

Inteliquent, Inc. is a provider of voice telecommunications services primarily on a wholesale basis. The Company offers its services using an all-Internet Protocol (IP) network, which enables to deliver connectivity for a range of media, including voice, and data and video. The Company’s solutions enable carriers and other providers to deliver voice traffic or other services where they do not have their own network. These solutions are called off-net services. It also provides solutions to customers, such as over-the-top (OTT) providers. The Company offers a range of services, including Local Transit Service, Long Distance Service, Switched Access Service, International Voice Service, Direct Inward Dialing Service and 8XX (Toll-Free) Service. The Company offers an alternative to facilitate the exchange of local traffic between various carriers by using its tandem switches instead of the Incumbent Local Exchange Carriers’ (ILECs’) tandems or direct connects.

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