Bandwidth (BAND) versus Centurylink (CTL) Financial Comparison

Bandwidth (NASDAQ: BAND) and Centurylink (NYSE:CTL) are both telecommunications services companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, risk and analyst recommendations.

Profitability

This table compares Bandwidth and Centurylink’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Bandwidth N/A N/A N/A
Centurylink 1.89% 7.99% 2.16%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Bandwidth and Centurylink, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Bandwidth 0 0 5 0 3.00
Centurylink 1 8 4 0 2.23

Bandwidth currently has a consensus target price of $29.80, indicating a potential upside of 29.28%. Centurylink has a consensus target price of $22.00, indicating a potential upside of 26.29%. Given Bandwidth’s stronger consensus rating and higher probable upside, analysts plainly believe Bandwidth is more favorable than Centurylink.

Institutional & Insider Ownership

42.1% of Centurylink shares are held by institutional investors. 0.6% of Centurylink shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Bandwidth and Centurylink’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Bandwidth $152.13 million 2.67 $22.35 million $0.82 28.11
Centurylink $17.47 billion 1.07 $626.00 million $0.58 30.03

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

Dividends

Centurylink pays an annual dividend of $2.16 per share and has a dividend yield of 12.4%. Bandwidth does not pay a dividend. Centurylink pays out 372.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Centurylink beats Bandwidth on 9 of the 15 factors compared between the two stocks.

Bandwidth Company Profile

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.

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.

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