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

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

Insider and Institutional Ownership

52.7% of TELUS Corporation shares are held by institutional investors. Comparatively, 77.8% of CenturyLink shares are held by institutional investors. 0.6% of CenturyLink shares are held 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.

Profitability

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

Net Margins Return on Equity Return on Assets
TELUS Corporation 9.55% 18.75% 5.44%
CenturyLink 2.20% 8.43% 2.36%

Dividends

TELUS Corporation pays an annual dividend of $1.46 per share and has a dividend yield of 4.1%. CenturyLink pays an annual dividend of $2.16 per share and has a dividend yield of 11.3%. TELUS Corporation pays out 92.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TELUS Corporation $10.33 billion 2.02 $3.27 billion $1.58 22.39
CenturyLink $16.97 billion 0.62 $6.06 billion $0.69 27.77

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.

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TELUS Corporation 0 0 5 0 3.00
CenturyLink 3 6 4 0 2.08

TELUS Corporation currently has a consensus target price of $45.00, indicating a potential upside of 27.19%. CenturyLink has a consensus target price of $25.64, indicating a potential upside of 33.80%. Given CenturyLink’s higher possible upside, analysts clearly believe CenturyLink is more favorable than TELUS Corporation.

Risk & Volatility

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

Summary

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

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.

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.

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