Telekom Austria (TKAGY) vs. Verizon Communications (VZ) Head-To-Head Analysis

Telekom Austria (OTCMKTS: TKAGY) and Verizon Communications (NYSE:VZ) are both utilities companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Dividends

Telekom Austria pays an annual dividend of $0.45 per share and has a dividend yield of 2.6%. Verizon Communications pays an annual dividend of $2.36 per share and has a dividend yield of 5.0%. Telekom Austria pays out 33.1% of its earnings in the form of a dividend. Verizon Communications pays out 63.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Verizon Communications has increased its dividend for 11 consecutive years. Verizon Communications is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Telekom Austria has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500. Comparatively, Verizon Communications has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Insider and Institutional Ownership

63.7% of Verizon Communications shares are held by institutional investors. 0.1% of Verizon Communications shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Telekom Austria and Verizon Communications, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Telekom Austria 0 2 0 0 2.00
Verizon Communications 0 7 14 0 2.67

Verizon Communications has a consensus target price of $54.94, indicating a potential upside of 15.34%. Given Verizon Communications’ stronger consensus rating and higher possible upside, analysts plainly believe Verizon Communications is more favorable than Telekom Austria.

Profitability

This table compares Telekom Austria and Verizon Communications’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Telekom Austria 5.70% 11.79% 4.45%
Verizon Communications 24.37% 42.62% 6.30%

Earnings & Valuation

This table compares Telekom Austria and Verizon Communications’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Telekom Austria $4.95 billion 1.15 $389.34 million $1.36 12.65
Verizon Communications $126.03 billion 1.56 $30.10 billion $3.74 12.74

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

Summary

Verizon Communications beats Telekom Austria on 15 of the 17 factors compared between the two stocks.

About Telekom Austria

Telekom Austria Aktiengesellschaft, together with its subsidiaries, provides fixed-line and mobile communications services to individuals, commercial and non-commercial organizations, and other national and foreign carriers. Its fixed-line services include access, Internet, fixed-to-mobile calls, international traffic, voice value-added services, interconnection, call center services, data and ICT solutions, television services, and public payphone services; and mobile communications services comprise digital mobile communications services, including value-added services, text and multimedia messaging, m-commerce, and information services. The company also provides voice telephony, convergent products, Internet access, data and IT solutions, value added services, wholesale services, and IP television and payment solutions, as well as mobile telephone and satellite television services. In addition, it sells end-user terminal equipment; and sets up customer lines that include installation work. As of December 31, 2017, the company provided mobile communication services to approximately 20.7 million customers; and had approximately 6.0 million fixed-line revenue generating units. It has operations in Austria, Slovenia, Bulgaria, Belarus, Croatia, the Republic of Serbia, and the Republic of Macedonia. The company is headquartered in Vienna, Austria. Telekom Austria Aktiengesellschaft is a subsidiary of América Móvil, S.A.B. de C.V.

About Verizon Communications

Verizon Communications Inc., through its subsidiaries, offers communications, information, and entertainment products and services to consumers, businesses, and governmental agencies worldwide. The company's Wireless segment provides wireless voice and data services; Internet access on various notebook computers and tablets; multimedia, business-focused, and location-based services, as well as international travel services; and network access services to deliver various Internet of Things products and services. This segment also provides wireless devices, including smartphones and basic phones, wearables, and tablets and other Internet access devices. As of December 31, 2017, it had 116.3 million retail connections. Its Wireline segment offers traditional circuit-based network products and services; networking solutions, comprising private Internet protocol (IP), Ethernet, and software-defined wide area network, as well as cyber security services; local exchange, regional, long distance, and toll-free calling services; voice messaging and conferencing services; and workforce productivity and customer contact center solutions, as well as residential fixed connectivity solutions, including Internet, TV, and voice services under the Fios brand name. This segment also provides premises equipment, as well as installation, maintenance, and site services; data, voice, local dial tone, and broadband services primarily to local, long distance, and wireless carriers; voice and networking products, Fios services, IP networking, voice solutions, security, and managed information technology services for small and medium businesses, state and local governments, and educational institutions; and security and managed network services. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was founded in 1983 and is headquartered in New York City, New York.

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