Head-To-Head Comparison: Level 3 Communications (NYSE:LVLT) vs. BT Group PLC (BT)

Level 3 Communications (NYSE: LVLT) and BT Group PLC (NYSE:BT) are both large-cap computer and technology companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, risk, profitability, institutional ownership, valuation and earnings.

Risk and Volatility

Level 3 Communications has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500. Comparatively, BT Group PLC has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500.

Insider & Institutional Ownership

1.0% of BT Group PLC shares are held by institutional investors. 0.5% of Level 3 Communications shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Dividends

BT Group PLC pays an annual dividend of $0.94 per share and has a dividend yield of 4.8%. Level 3 Communications does not pay a dividend. BT Group PLC pays out 90.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. BT Group PLC has raised its dividend for 5 consecutive years.

Analyst Ratings

This is a summary of recent ratings for Level 3 Communications and BT Group PLC, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Level 3 Communications 1 11 2 0 2.07
BT Group PLC 3 7 8 0 2.28

Level 3 Communications currently has a consensus target price of $60.76, indicating a potential upside of 8.13%. BT Group PLC has a consensus target price of $357.94, indicating a potential upside of 1,744.11%. Given BT Group PLC’s stronger consensus rating and higher probable upside, analysts plainly believe BT Group PLC is more favorable than Level 3 Communications.

Profitability

This table compares Level 3 Communications and BT Group PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Level 3 Communications 7.85% 5.80% 2.55%
BT Group PLC 7.14% 40.09% 6.79%

Earnings and Valuation

This table compares Level 3 Communications and BT Group PLC’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Level 3 Communications $8.17 billion 2.49 $2.66 billion $1.76 31.93
BT Group PLC $31.86 billion 1.21 $9.06 billion $1.04 18.66

BT Group PLC has higher revenue and earnings than Level 3 Communications. BT Group PLC is trading at a lower price-to-earnings ratio than Level 3 Communications, indicating that it is currently the more affordable of the two stocks.

Summary

BT Group PLC beats Level 3 Communications on 10 of the 17 factors compared between the two stocks.

About Level 3 Communications

Level 3 Communications, Inc. is a provider of a range of integrated communications services. The Company’s operating segments include North America, EMEA and Latin America. The North America includes operations in Atlanta, Georgia; Littleton, Colorado; Miami, Florida; Montreal, Canada; New York, New York; Phoenix, Arizona; Pittsburgh, Pennsylvania; Southfield, Michigan, and Tulsa, Oklahoma. The Europe segment includes operations in Basingstoke, England; Crewe, England; Dublin, Ireland; London, England; Amsterdam, The Netherlands, and Paris, France. The Latin America includes operations in Colombia; Buenos Aires, Argentina; Caracas, Venezuela; Lima, Peru; Quito, Ecuador; Santiago, Chile, and Sao Paulo, Brazil. It offers optical, Internet Protocol, computing and storage technologies. It offers a range of communications services, including Internet Protocol (IP) and data services, transport and fiber services, colocation and data center services, security services and voice services.

About BT Group PLC

BT Group plc is a communications services company. The Company is engaged in selling fixed-voice services, broadband, mobile and television products and services, as well as managed networked information technology (IT) solutions and cyber security protection. Its segments include Consumer, which provides fixed-voice, broadband, TV and mobile services; EE, which is a mobile network operator in the United Kingdom and provides mobile and fixed communications services to consumers; Business and Public Sector, which provides communications and IT services to businesses and the public sector in the United Kingdom and the Republic of Ireland (RoI) ;Global Services, which provides managed networked IT services to corporate customers; Wholesale and Ventures, which provides fixed and mobile services to communications providers (CPs); and Openreach, which provides copper and fiber connections between its exchanges and homes and businesses.

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