Reviewing Neustar (NSR) & TELUS Corporation (TU)

Neustar (NYSE: NSR) and TELUS Corporation (NYSE:TU) are both telecommunications services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.

Earnings & Valuation

This table compares Neustar and TELUS Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Neustar N/A N/A N/A $3.27 10.24
TELUS Corporation $10.22 billion 2.11 $3.23 billion $1.58 23.01

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

Institutional & Insider Ownership

88.8% of Neustar shares are held by institutional investors. Comparatively, 51.1% of TELUS Corporation shares are held by institutional investors. 2.9% of Neustar shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Neustar and TELUS Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neustar 15.50% 19.28% 8.80%
TELUS Corporation 9.55% 18.75% 5.44%

Analyst Recommendations

This is a summary of recent ratings and price targets for Neustar and TELUS Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neustar 0 3 0 0 2.00
TELUS Corporation 0 0 5 0 3.00

Neustar currently has a consensus price target of $29.50, suggesting a potential downside of 11.94%. TELUS Corporation has a consensus price target of $45.00, suggesting a potential upside of 23.80%. Given TELUS Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe TELUS Corporation is more favorable than Neustar.

Dividends

TELUS Corporation pays an annual dividend of $1.58 per share and has a dividend yield of 4.3%. Neustar does not pay a dividend. TELUS Corporation pays out 100.0% 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

Neustar has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, TELUS Corporation has a beta of 0.89, indicating that its stock price is 11% less volatile than the S&P 500.

Summary

Neustar beats TELUS Corporation on 8 of the 13 factors compared between the two stocks.

About Neustar

NeuStar, Inc. is a global information services provider. The Company’s cloud-based platforms and differentiated data sets offer informative, real-time analytics, which enable clients to make actionable, data-driven decisions. It provides chief marketing officers a suite of services to plan their media spends, identify and locate desired customers, invest in marketing campaigns, deliver relevant offers and measure the performance of these activities. Security professionals use the Company’s solutions to maximize Web performance and protect against malicious attacks. It enables the exchange of essential operating information across multiple carriers to provision and manage services, assisting clients with order processing and routing of customer inquiries. The Company’s services include marketing services, security services, data services and number portability administration center (NPAC) services.

About TELUS Corporation

TELUS Corporation (TELUS) is a telecommunications company. The Company provides a range of telecommunications services and products, including wireless and wireline voice and data. Its data services include Internet protocol (IP), television (TV), hosting, managed information technology and cloud-based services, and certain healthcare solutions. The Company operates through two business segments: Wireless segment and Wireline segment. Its wireless and wireline businesses are primarily operated through TELUS Communications Company (TCC). The Company offers business services, including healthcare, across wireless and wireline are supported through TELUS sales representatives, product specialists, independent dealers and online self-serve applications for small and medium-sized businesses (SMBs). Its business process outsourcing services are supported through sales representatives and client relationship management teams.

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