CenturyLink (CTL) versus TELUS Corporation (TU) Head to Head Comparison

CenturyLink (NYSE: CTL) and TELUS Corporation (NYSE:TU) are both large-cap computer and technology companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Profitability

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

Net Margins Return on Equity Return on Assets
CenturyLink 2.20% 8.43% 2.36%
TELUS Corporation 9.96% 19.11% 5.58%

Dividends

CenturyLink pays an annual dividend of $2.16 per share and has a dividend yield of 10.0%. TELUS Corporation pays an annual dividend of $1.46 per share and has a dividend yield of 4.1%. CenturyLink pays out 313.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. TELUS Corporation pays out 89.0% 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

CenturyLink has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, TELUS Corporation has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CenturyLink $16.97 billion 0.69 $6.06 billion $0.69 31.39
TELUS Corporation $10.21 billion 2.05 $3.33 billion $1.64 21.57

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

Insider and Institutional Ownership

78.0% of CenturyLink shares are owned by institutional investors. Comparatively, 52.5% of TELUS Corporation shares are owned by institutional investors. 0.6% of CenturyLink shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for CenturyLink and TELUS Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CenturyLink 3 5 4 0 2.08
TELUS Corporation 0 1 5 0 2.83

CenturyLink currently has a consensus target price of $25.64, suggesting a potential upside of 18.36%. TELUS Corporation has a consensus target price of $42.50, suggesting a potential upside of 20.12%. Given TELUS Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe TELUS Corporation is more favorable than CenturyLink.

Summary

TELUS Corporation beats CenturyLink on 10 of the 16 factors compared between the two stocks.

About CenturyLink

CenturyLink, Inc. is an integrated communications company. The Company is engaged in providing an array of communications services to its residential and business customers. Its segments include business, which provides strategic, legacy and data integration products and services to small, medium and enterprise business, wholesale and governmental customers, including other communication providers, and consumer, which provides strategic and legacy products and services to residential customers. Its communications services include local and long-distance voice, broadband, Multi-Protocol Label Switching (MPLS), private line (including special access), Ethernet, colocation, hosting (including cloud hosting and managed hosting), data integration, video, network, public access, Voice over Internet Protocol (VoIP), information technology and other ancillary services. As of December 31, 2016, it served approximately 5.9 million broadband subscribers and 325,000 Prism TV subscribers.

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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