PLDT (NYSE: PHI) and Frontier Communications Corporation (NASDAQ:FTR) are both computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.
Institutional and Insider Ownership
10.2% of PLDT shares are owned by institutional investors. 0.9% of Frontier Communications Corporation shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Volatility and Risk
PLDT has a beta of 1.03, indicating that its share price is 3% more volatile than the S&P 500. Comparatively, Frontier Communications Corporation has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.
Earnings and Valuation
This table compares PLDT and Frontier Communications Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|PLDT||$3.19 billion||2.28||$1.21 billion||$1.81||18.63|
|Frontier Communications Corporation||$9.90 billion||0.12||$3.87 billion||($6.30)||-2.48|
Frontier Communications Corporation has higher revenue and earnings than PLDT. Frontier Communications Corporation is trading at a lower price-to-earnings ratio than PLDT, indicating that it is currently the more affordable of the two stocks.
This is a summary of current recommendations and price targets for PLDT and Frontier Communications Corporation, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Frontier Communications Corporation||1||10||3||0||2.14|
Frontier Communications Corporation has a consensus target price of $3.18, suggesting a potential downside of 79.65%. Given Frontier Communications Corporation’s higher probable upside, analysts plainly believe Frontier Communications Corporation is more favorable than PLDT.
PLDT pays an annual dividend of $1.60 per share and has a dividend yield of 4.7%. Frontier Communications Corporation pays an annual dividend of $2.40 per share and has a dividend yield of 15.4%. PLDT pays out 88.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Frontier Communications Corporation pays out -38.1% of its earnings in the form of a dividend. Frontier Communications Corporation is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares PLDT and Frontier Communications Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Frontier Communications Corporation||-2.65%||0.19%||0.03%|
PLDT beats Frontier Communications Corporation on 8 of the 14 factors compared between the two stocks.
PLDT, Inc., formerly Philippine Long Distance Telephone Company (PLDT), is a telecommunications service provider in the Philippines. The Company operates through three business segments: Wireless, Fixed Line and Others. The Company, through its business segments, offers a range of telecommunications services across the Philippines’ fiber optic backbone and wireless and fixed line networks. The Company’s wireless segment provides cellular, wireless broadband and other services, and digital platforms and mobile financial services. Its Fixed Line segment provides local exchange, international long distance, national long distance, data and other network and miscellaneous services under its fixed line business. It offers postpaid and prepaid fixed line services. Its Other business consists of PLDT Communications and Energy Ventures, Inc. (PCEV), an investment holding company. It also focuses on providing wireless voice communications and wireless data communications.
About Frontier Communications Corporation
Frontier Communications Corporation (Frontier) is a provider of communications services in the United States. The Company offers a portfolio of communications services for residential and business customers. Its products and services include data and Internet services, video services, voice services, access services and customer premise equipment (CPE). The Company offers a range of broadband services. The principal residential service it provides is broadband Internet service. Its commercial services include Ethernet, Dedicated Internet, Multiprotocol Label Switching (MPLS), Time Division Multiplexing (TDM) data transport services and optical transport services. It also offers wireless broadband services (using unlicensed spectrum) in various markets utilizing networks that it owns or operates. In addition, the Company offers its Frontier Secure suite of products, including computer security, cloud backup and sharing, identity protection and equipment insurance.
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