Reviewing j2 Global (JCOM) & FairPoint Communications (FRP)

j2 Global (NASDAQ: JCOM) and FairPoint Communications (NASDAQ:FRP) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares j2 Global and FairPoint Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
j2 Global 12.60% 26.43% 11.11%
FairPoint Communications -11.81% N/A -7.88%

Analyst Ratings

This is a breakdown of current recommendations and price targets for j2 Global and FairPoint Communications, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
j2 Global 0 1 3 0 2.75
FairPoint Communications 0 1 0 0 2.00

j2 Global currently has a consensus price target of $101.75, suggesting a potential upside of 36.61%. FairPoint Communications has a consensus price target of $17.00, suggesting a potential upside of 6.58%. Given j2 Global’s stronger consensus rating and higher possible upside, equities analysts plainly believe j2 Global is more favorable than FairPoint Communications.

Valuation & Earnings

This table compares j2 Global and FairPoint Communications’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
j2 Global $874.26 million 4.12 $152.43 million $2.70 27.59
FairPoint Communications N/A N/A N/A $2.27 7.03

j2 Global has higher revenue and earnings than FairPoint Communications. FairPoint Communications is trading at a lower price-to-earnings ratio than j2 Global, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

88.6% of FairPoint Communications shares are held by institutional investors. 5.2% of j2 Global shares are held by insiders. Comparatively, 7.6% of FairPoint Communications 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.

Volatility & Risk

j2 Global has a beta of 0.88, meaning that its share price is 12% less volatile than the S&P 500. Comparatively, FairPoint Communications has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Dividends

j2 Global pays an annual dividend of $1.54 per share and has a dividend yield of 2.1%. FairPoint Communications does not pay a dividend. j2 Global pays out 57.0% of its earnings in the form of a dividend.

Summary

j2 Global beats FairPoint Communications on 10 of the 13 factors compared between the two stocks.

j2 Global Company Profile

j2 Global, Inc. is a provider of services delivered through the Internet. The Company provides cloud services to businesses of all sizes, from individuals to enterprises. The Company operates in two segments: Business Cloud Services and Digital Media. The Company’s Digital Media business segment consists of the Web properties and business operations of Ziff Davis, Inc. (Ziff Davis). The Company’s cloud services and solutions include fax, voice and unified communications, email and customer relationship management, online backup, global network and operations, and customer support services. In February 2013, it acquired IGN Entertainment, Inc. On November 9, 2012, the Company acquired Ziff Davis. Effective March 18, 2013, it acquired MetroFax Inc. In April 2013, the Company acquired Backup Connect BV.

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.

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