Frontier Communications (NASDAQ: FTR) and Bandwidth (NASDAQ:BAND) are both small-cap telecommunications services companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, dividends, risk, profitability, analyst recommendations and institutional ownership.
Insider & Institutional Ownership
62.9% of Frontier Communications shares are held by institutional investors. 0.9% of Frontier Communications shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This is a breakdown of recent recommendations for Frontier Communications and Bandwidth, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Frontier Communications currently has a consensus target price of $9.33, indicating a potential upside of 12.35%. Bandwidth has a consensus target price of $29.80, indicating a potential upside of 29.51%. Given Bandwidth’s stronger consensus rating and higher possible upside, analysts plainly believe Bandwidth is more favorable than Frontier Communications.
Valuation and Earnings
This table compares Frontier Communications and Bandwidth’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Frontier Communications||$8.90 billion||0.07||-$373.00 million||($13.75)||-0.60|
|Bandwidth||$152.13 million||2.67||$22.35 million||$0.82||28.06|
Bandwidth has lower revenue, but higher earnings than Frontier Communications. Frontier Communications is trading at a lower price-to-earnings ratio than Bandwidth, indicating that it is currently the more affordable of the two stocks.
This table compares Frontier Communications and Bandwidth’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Frontier Communications pays an annual dividend of $2.40 per share and has a dividend yield of 28.9%. Bandwidth does not pay a dividend. Frontier Communications pays out -17.5% of its earnings in the form of a dividend.
Bandwidth beats Frontier Communications on 10 of the 15 factors compared between the two stocks.
About Frontier Communications
Frontier Communications Corporation (Frontier) is a provider of communications services in the United States. The Company offers a portfolio of communications services for residential and business customers. Its products and services include data and Internet services, video services, voice services, access services and customer premise equipment (CPE). The Company offers a range of broadband services. The principal residential service it provides is broadband Internet service. Its commercial services include Ethernet, Dedicated Internet, Multiprotocol Label Switching (MPLS), Time Division Multiplexing (TDM) data transport services and optical transport services. It also offers wireless broadband services (using unlicensed spectrum) in various markets utilizing networks that it owns or operates. In addition, the Company offers its Frontier Secure suite of products, including computer security, cloud backup and sharing, identity protection and equipment insurance.
Bandwidth Inc., formerly Bandwidth.com, Inc., is a cloud-based communications platform-as-a-service provider (CPaaS) that enables enterprises to create, scale and operate voice or text communications services across any mobile application or connected device or enterprises. The Company has two operating and reportable segments, CPaaS and Other. The Company’s solutions include a broad range of software APIs for voice and text functionality and IP voice network. The Company’s sophisticated and easy-to-use software APIs allow enterprises to enhance their products and services by incorporating advanced voice and text capabilities. The Company offers advanced monitoring, reporting and analytics, superior customer service, dedicated operating teams, and personalized support.
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