Comparing FairPoint Communications (FRP) and Black Box Corporation (BBOX)

FairPoint Communications (NASDAQ: FRP) and Black Box Corporation (NASDAQ:BBOX) are both telecommunications services companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Valuation & Earnings

This table compares FairPoint Communications and Black Box Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FairPoint Communications N/A N/A N/A $2.27 7.03
Black Box Corporation $828.90 million 0.06 $20.29 million ($1.08) -3.01

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

Dividends

Black Box Corporation pays an annual dividend of $0.48 per share and has a dividend yield of 14.8%. FairPoint Communications does not pay a dividend. Black Box Corporation pays out -44.4% of its earnings in the form of a dividend.

Insider and Institutional Ownership

88.6% of FairPoint Communications shares are held by institutional investors. Comparatively, 91.0% of Black Box Corporation shares are held by institutional investors. 7.6% of FairPoint Communications shares are held by insiders. Comparatively, 3.7% of Black Box Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares FairPoint Communications and Black Box Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FairPoint Communications -11.81% N/A -7.88%
Black Box Corporation -1.97% 3.05% 1.00%

Analyst Recommendations

This is a summary of recent recommendations for FairPoint Communications and Black Box Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FairPoint Communications 0 1 0 0 2.00
Black Box Corporation 0 1 0 0 2.00

FairPoint Communications presently has a consensus price target of $17.00, indicating a potential upside of 6.58%. Black Box Corporation has a consensus price target of $10.00, indicating a potential upside of 207.69%. Given Black Box Corporation’s higher probable upside, analysts plainly believe Black Box Corporation is more favorable than FairPoint Communications.

Volatility and Risk

FairPoint Communications has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Black Box Corporation has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500.

Summary

Black Box Corporation beats FairPoint Communications on 9 of the 11 factors compared between the two stocks.

FairPoint Communications Company Profile

FairPoint Communications, Inc. is a provider of data, voice and communications services to business, wholesale and residential customers within its service territories. The Company offers its customers a suite of services, such as Ethernet, Session Initiation Protocol Trunking (SIP-Trunking), hosted Primary Branch Exchange (hosted PBX), managed services, data center colocation services, high capacity data transport and other Internet protocol (IP)-based services over its fiber-based network. It also offers Internet access, high-speed data, and local and long distance voice services. It provides services, such as Data and Internet Services, which include optical, Ethernet, Ethernet virtual circuit technology for cellular backhaul and private line special access services. It offers Voice Services, which include Local Calling Services, Long Distance Services and 9-1-1 Services. It also offers Network Transport Services, Interstate Access Charges and Intrastate Access Charges.

Black Box Corporation Company Profile

Black Box Corporation is a technology solutions provider. The Company is engaged in designing, building, managing and securing the information technology (IT) infrastructure. Offerings under the Company’s Products platform include IT infrastructure, specialty networking, multimedia and keyboard/video/mouse (KVM) switching. Offerings under its Services platform include unified communications, data infrastructure and managed services. It conducts business globally and manages its business on a geographic-service type basis consisting of four segments: North America Products, North America Services, International Products and International Services. The offerings of its Products platform are distributed through value-added resellers, direct marketing manufacturers, mass merchandisers, Web retailers and others. The offerings of its Services platform are distributed through value-added resellers, manufacturers and large system integrators, among others.

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