Reviewing CenturyLink (NYSE:CTL) & Shaw Communications (SJR)

CenturyLink (NYSE: CTL) and Shaw Communications (NYSE:SJR) are both large-cap computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares CenturyLink and Shaw Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CenturyLink 2.20% 8.43% 2.36%
Shaw Communications 10.01% 9.31% 3.57%

Dividends

CenturyLink pays an annual dividend of $2.16 per share and has a dividend yield of 10.0%. Shaw Communications pays an annual dividend of $0.91 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. Shaw Communications pays out 113.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

78.0% of CenturyLink shares are held by institutional investors. Comparatively, 53.2% of Shaw Communications shares are held by institutional investors. 0.6% of CenturyLink shares are held by company insiders. Comparatively, 1.0% of Shaw Communications shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for CenturyLink and Shaw Communications, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CenturyLink 3 5 4 0 2.08
Shaw Communications 1 3 3 0 2.29

CenturyLink currently has a consensus target price of $25.64, indicating a potential upside of 18.36%. Shaw Communications has a consensus target price of $27.33, indicating a potential upside of 24.24%. Given Shaw Communications’ stronger consensus rating and higher probable upside, analysts plainly believe Shaw Communications is more favorable than CenturyLink.

Volatility & Risk

CenturyLink has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Shaw Communications has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Valuation and Earnings

This table compares CenturyLink and Shaw Communications’ revenue, earnings per share (EPS) 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
Shaw Communications $4.18 billion 2.60 $1.67 billion $0.80 27.50

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

Summary

Shaw Communications beats CenturyLink on 10 of the 16 factors compared between the two stocks.

CenturyLink Company Profile

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.

Shaw Communications Company Profile

Shaw Communications Inc. (Shaw) is a diversified connectivity provider. The Company operates through four divisions: Consumer, Wireless, Business Network Services and Business Infrastructure Services. Under the Consumer division, the Company offers Cable telecommunications and Satellite video services to residential customers. Its Business Network Services division offers data networking, Cable telecommunications, Satellite video and fleet tracking services to businesses and public sector entities. Its Business Infrastructure Services division offers data center colocation, cloud technology and managed information technology (IT) solutions to businesses. The Company offers wireless services for voice and data communications through its Wireless division. Its wireline services offer approximately 120 high definition (HD) channels and over 10,000 on-demand, pay-per-view and subscription movie and television programming titles.

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