Financial Analysis: Consolidated Communications (CNSL) and Its Competitors

Consolidated Communications (NASDAQ: CNSL) is one of 74 public companies in the “Telephone communication, except radio” industry, but how does it contrast to its competitors? We will compare Consolidated Communications to similar companies based on the strength of its earnings, analyst recommendations, dividends, risk, profitability, institutional ownership and valuation.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Consolidated Communications and its competitors, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Consolidated Communications 0 4 1 2 2.71
Consolidated Communications Competitors 630 1915 1976 101 2.33

Consolidated Communications presently has a consensus target price of $17.50, suggesting a potential upside of 56.39%. As a group, “Telephone communication, except radio” companies have a potential upside of 74.14%. Given Consolidated Communications’ competitors higher possible upside, analysts clearly believe Consolidated Communications has less favorable growth aspects than its competitors.

Dividends

Consolidated Communications pays an annual dividend of $1.55 per share and has a dividend yield of 13.9%. Consolidated Communications pays out 596.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Telephone communication, except radio” companies pay a dividend yield of 4.5% and pay out 76.9% of their earnings in the form of a dividend.

Insider and Institutional Ownership

75.8% of Consolidated Communications shares are held by institutional investors. Comparatively, 47.6% of shares of all “Telephone communication, except radio” companies are held by institutional investors. 2.4% of Consolidated Communications shares are held by insiders. Comparatively, 6.7% of shares of all “Telephone communication, except radio” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Consolidated Communications has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500. Comparatively, Consolidated Communications’ competitors have a beta of 0.58, meaning that their average share price is 42% less volatile than the S&P 500.

Valuation and Earnings

This table compares Consolidated Communications and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Consolidated Communications $1.06 billion $64.94 million 43.04
Consolidated Communications Competitors $17.49 billion $2.02 billion 16.99

Consolidated Communications’ competitors have higher revenue and earnings than Consolidated Communications. Consolidated Communications is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Consolidated Communications and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Consolidated Communications 4.60% -0.29% -0.04%
Consolidated Communications Competitors -11.96% -28.60% -0.84%

Summary

Consolidated Communications beats its competitors on 9 of the 15 factors compared.

Consolidated Communications Company Profile

Consolidated Communications Holdings, Inc., through its subsidiaries, provides various integrated communications services to business and residential customers in the United States. It offers a range of communication services and products that include local and long-distance, high-speed broadband Internet access, video, voice over Internet protocol, private line, custom calling features, security, cloud, data center, managed and IT, and directory publishing services, as well as engages in equipment sales activities. The company also sells and supports telecommunications equipment, such as key, private branch exchange, IP-based telephone systems, and other hardware solutions, as well as offers support services to medium and large business customers. As of December 31, 2017, it had approximately 972 thousand voice connections, 784 thousand data connections, and 103 thousand video connections. The company serves customers in consumer, commercial, and carrier channels. Consolidated Communications Holdings, Inc. was founded in 1894 and is headquartered in Mattoon, Illinois.

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